[10-Q] PROASSURANCE CORP Quarterly Earnings Report

Q: What were ProAssurance (PRA) Q3 2025 results?

Total revenues were $279,554 (in thousands) and net income was $1,446 (in thousands), for EPS of $0.03 .

Q: How did underwriting and investment activity affect Q3 performance for PRA?

Net premiums earned were $233,404 (in thousands); net investment income was $40,442 (in thousands). Losses and LAE were $186,199 (in thousands).

Q: What is the status and price of the ProAssurance merger?

The all‑cash merger is set at $25.00 per share , with several state approvals received and other reviews pending.

Q: What merger‑related costs did PRA record?

Transaction costs were approximately $3.0 million in Q3 and $14.6 million year‑to‑date.

Q: What balance sheet changes stand out for PRA?

Shareholders’ equity was $1,304,252 (in thousands); AOCI improved to $(90,841) ; reserves for losses and LAE were $3,118,937 (in thousands).

Q: What were PRA’s operating cash flows year‑to‑date?

Net cash provided by (used in) operating activities was $(12,476) (in thousands).

Q: When does PRA anticipate closing the merger?

The company currently anticipates closing by June 30, 2026 , subject to remaining approvals and conditions.

Filing Impact

(Neutral)

Filing Sentiment

(Neutral)

Form Type

10-Q

Rhea-AI Filing Summary

ProAssurance (PRA) reported third‑quarter results and updated its pending merger with The Doctors Company. Total revenues were $279,554 (in thousands)net income was $1,446 (in thousands), for EPS of $0.03. Net premiums earned were $233,404 (in thousands) and net investment income was $40,442 (in thousands). Expenses totaled $275,185 (in thousands), driven by losses and loss adjustment expenses of $186,199 (in thousands) and operating expense of $46,817 (in thousands).

On the balance sheet, shareholders’ equity rose to $1,304,252 (in thousands), as accumulated other comprehensive loss improved to $(90,841) from $(172,391) at year‑end, while the reserve for losses and LAE decreased to $3,118,937 (in thousands). Year‑to‑date operating cash flow was $(12,476) (in thousands).

The company continues to pursue its all‑cash merger at $25.00 per share. Stockholders approved the deal; HSR early termination was granted, and regulatory approvals have been received in Alabama, the District of Columbia, Illinois, Missouri and Vermont, with reviews pending in California, Pennsylvania and Texas. Transaction costs were $3.0 million in Q3 and $14.6 million year‑to‑date. The company anticipates closing by June 30, 2026, subject to remaining conditions.

Positive

None.

Negative

None.

Insights

Q3 was modest; merger progress continues toward a $25 cash exit.
ProAssurance posted Q3 EPS of $0.03 on total revenues of $279,554 (in thousands). Losses and LAE of $186,199 (in thousands) remained the largest cost driver. Net investment income of $40,442 (in thousands) supported results, while net realized/unrealized gains were limited.
Equity improved to $1,304,252 (in thousands) as AOCI recovered to $(90,841). Reserves declined to $3,118,937 (in thousands). Operating cash flow was $(12,476) (in thousands) year‑to‑date, reflecting claims dynamics and working capital timing.
The $25.00 per‑share cash merger advanced: HSR early termination received; several state approvals are complete, with reviews pending in California, Pennsylvania, and Texas. Management recorded $3.0M in Q3 and $14.6M year‑to‑date transaction costs. Closing depends on remaining regulatory approvals; the company currently anticipates completion by June 30, 2026.

11/04/2025 - 04:18 PM

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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2025 or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to
Commission File Number: 0-16533
ProAssurance Corporation
(Exact name of registrant as specified in its charter)
Delaware 63-1261433
(State or other jurisdiction of
incorporation or organization) (I.R.S. Employer Identification No.)
100 Brookwood Place, Birmingham, AL 35209
(Address of principal executive offices) (Zip Code)
(205) 877-4400
(Registrant’s telephone number,
including area code) (Former name, former address and former
fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock, par value $0.01 per share PRA New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☒ Accelerated filer ☐
Non-accelerated filer ☐ Smaller reporting company ☐
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes ☐   No  ☒
As of October 30, 2025, there were 51,413,643 shares of the registrant’s common stock outstanding.

Table of Contents
Glossary of Terms and Acronyms

When the following terms and acronyms appear in the text of this report, they have the meanings indicated below.
Term Meaning
AOCI
Accumulated other comprehensive income (loss)
ASU
Accounting Standards Update
Board
Board of Directors of ProAssurance Corporation
BOLI
Business owned life insurance
CARES Act Coronavirus Aid, Relief and Economic Security Act
CODM
Chief Operating Decision Maker
DDR
Death, disability and retirement
DPAC
Deferred policy acquisition costs
Eastern Re
Eastern Re, LTD, S.P.C.
EBUB
Earned but unbilled premium
ERC Employee Retention Credit
FAL
Funds at Lloyd's
FASB
Financial Accounting Standards Board
FHLB
Federal Home Loan Bank
FHLMC
Federal Home Loan Mortgage Corporation
FNMA
Federal National Mortgage Association
GAAP
Generally accepted accounting principles in the United States of America
GNMA
Government National Mortgage Association
IBNR
Incurred but not reported
Inova Re
Inova Re, LTD, S.P.C.
Interest Rate Swaps ProAssurance's two forward-starting interest rate swap agreements associated with its Revolving Credit Agreement and Term Loan
IRS
Internal Revenue Service
LLC
Limited liability company
Lloyd's
Lloyd's of London market
LP
Limited partnership
MPL
Medical Professional Liability
Medical Technology Liability
Medical technology and life sciences products liability
NAV
Net asset value
NOL
Net operating loss
NORCAL NORCAL Insurance Company, formerly known as NORCAL Mutual Insurance Company
NRSRO
Nationally recognized statistical rating organization
NYSE
New York Stock Exchange
OBBBA One Big Beautiful Bill Act H.R.1 of 2025
OCI
Other comprehensive income (loss)
PCAOB
Public Company Accounting Oversight Board
PPM RRG Preferred Physicians Medical Risk Retention Group, a Mutual Insurance Company
Revolving Credit Agreement
ProAssurance's $250 million revolving credit agreement
ROE
Return on equity
ROU
Right-of-use
SEC
Securities and Exchange Commission
SOFR Secured Overnight Financing Rate
SPC
Segregated portfolio cell
Specialty P&C
Specialty Property and Casualty
Syndicate 1729
Lloyd's of London Syndicate 1729
2
Table of Contents
Term Meaning
Syndicate 6131
Lloyd's of London Syndicate 6131 was a Special Purpose Arrangement with Lloyd's of London Syndicate 1729.
TCJA
Tax Cuts and Jobs Act H.R.1 of 2017
Term Loan ProAssurance's $125 million delayed draw term loan
U.K.
United Kingdom of Great Britain and Northern Ireland
ULAE
Unallocated loss adjustment expenses
VIE
Variable interest entity
VOBA
Value of business acquired

3
Table of Contents
Caution Regarding Forward-Looking Statements
Any statements in this Form 10-Q that are not historical facts or explicitly stated as an opinion are specifically identified as forward-looking statements. These statements are based upon our estimates and anticipation of future events and are subject to significant risks, assumptions and uncertainties that could cause actual results to vary materially from the expected results described in the forward-looking statements. Forward-looking statements are identified by words such as, but not limited to, "anticipate," "believe," "continue," "could," "estimate," "expect," "hope," "hopeful," "intend," "likely," "may," "optimistic," "plan," "possible," "potential," "preliminary," "project," "should," "will," "would" and other analogous expressions. There are numerous factors that could cause our actual results to differ materially from those in the forward-looking statements. Thus, sentences and phrases that we use to convey our view of future events and trends are expressly designated as forward-looking statements as are sections of this Form 10-Q that are identified as giving our outlook on future business.
Forward-looking statements relating to our business include among other things: statements concerning future liquidity and capital requirements, investment valuation and performance, return on equity, financial ratios, net income, premiums, losses and loss reserve, premium rates and retention of current business, competition and market conditions, the expansion of product lines, the development or acquisition of business in new geographical areas, the pricing or 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 matters.
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:
l changes in general economic conditions, including the impact of inflation, including medical and social inflation, and unemployment;
l regulatory, legislative and judicial actions or decisions that could affect our business plans or operations;
l the enactment or repeal of tort reforms;
l 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;
l changes in the interest, tax and foreign currency exchange rate environment;
l resolution of uncertain tax matters and changes in tax laws;
l changes in laws or government regulations regarding financial markets or market activity that may affect our business;
l changes in the ability, or perception thereof, of the U.S. government to meet its obligations that may affect the U.S. economy and our business;
l performance of financial markets affecting the fair value of our investments or making it difficult to determine the value of our investments;
l changes in requirements or accounting policies and practices that may be adopted by our regulatory agencies, the governments of states in which we are domiciled, the FASB, the SEC, the PCAOB or the NYSE that may affect our business;
l changes in laws or government regulations affecting the financial services industry, the property and casualty insurance industry, the workers' compensation insurance industry or particular insurance lines underwritten by our subsidiaries;
l 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;
l 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;
l the effect of cyclical insurance industry trends on our underwriting, including demand and pricing in the insurance and reinsurance markets in which we operate;
l uncertainties inherent in the estimate of our loss and loss adjustment expense reserve and reinsurance recoverable;
l changes in the availability, cost, quality or collectability of insurance/reinsurance;
l the results of litigation, including pre- or post-trial motions, trials and/or appeals we undertake;
l effects on our claims costs from mass tort litigation that are different from that anticipated by us;
l allegations of bad faith which may arise from our handling of any particular claim, including failure to settle;
l loss or consolidation of independent agents, agencies, brokers or brokerage firms;
l changes in our organization, compensation and benefit plans;
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l changes in the business or competitive environment may alter or limit the effectiveness of our business strategy and impact our revenues;
l our ability to retain and recruit senior management and other qualified personnel;
l the availability, integrity and security of our technology infrastructure and that of our third-party providers, including any susceptibility to cyber-attacks which might result in a loss of information, operating capability or actual monetary loss;
l the impact of new systems or systems consolidation on our information technology infrastructure;
l the impact of machine learning and artificial intelligence on the insurance industry as well as on our insureds and risks we insure;
l
the impact of a catastrophe, natural or man-made, including a pandemic event, as it relates to our business and insurance operations, investment results as well as on our insureds' operations and the risks for which we insure;
l
the impact of a catastrophic man-made event, such as acts of terrorism, acts of war and civil and political unrest;
l the effects of terrorism-related insurance legislation and laws;
l the impact of guaranty funds and other state assessments;
l changes to the ratings assigned by a rating agency to our holding company or insurance subsidiaries, individually or as a group;
l provisions in our charter documents, Delaware law and state insurance laws may impede attempts to replace or remove management or may impede a takeover;
l state insurance restrictions may prohibit assets held by our insurance subsidiaries, including cash and investment securities, from being used for general corporate purposes;
l 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;
l the risk that a condition for completion of the proposed merger transaction between ProAssurance Corporation and The Doctors Company, including the required regulatory approvals, may not be satisfied in a timely manner or at all;
l the effects on our business and financial condition that may result if the proposed merger transaction with The Doctors Company is terminated prior to completion; and
l our ability to retain customers, agents or management and other key personnel as a result of the proposed merger transaction with The Doctors Company.
Our results may differ materially from those we expect and discuss in any forward-looking statements. The principal risk factors that may cause these material differences are described in "Item 1A, Risk Factors" in our December 31, 2024 report on Form 10-K and other documents we file with the SEC, such as our quarterly reports on Form 10-Q. Other than as described under the heading "Item 1A, Risk Factors" herein, there have been no material changes to the "Risk Factors" disclosed in Part 1, Item 1A of ProAssurance's December 31, 2024 report on Form 10-K.
We caution readers not to place undue reliance on any such forward-looking statements, which are based upon conditions existing only as of the date made, and advise readers that these factors could affect our financial performance and could cause actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements. Except as required by law or regulations, 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.
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TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
ITEM 1.
FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - SEPTEMBER 30, 2025 AND DECEMBER 31, 2024
7
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN CAPITAL (UNAUDITED) - THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024
8
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED) - THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024
9
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024
10
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
12
BASIS OF PRESENTATION
12
FAIR VALUE MEASUREMENT
14
INVESTMENTS
21
INCOME TAXES
28
RESERVE FOR LOSSES AND LOSS ADJUSTMENT EXPENSES
28
COMMITMENTS AND CONTINGENCIES
30
DEBT
30
DERIVATIVES
31
SHAREHOLDERS' EQUITY
32
VARIABLE INTEREST ENTITIES
33
EARNINGS (LOSS) PER SHARE
34
SEGMENT INFORMATION
34
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
39
ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
78
ITEM 4.
CONTROLS AND PROCEDURES
81
PART II. OTHER INFORMATION
ITEM 1.
LEGAL PROCEEDINGS
81
ITEM 1A.
RISK FACTORS
81
ITEM 2.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
82
ITEM 5.
OTHER INFORMATION
82
ITEM 6.
EXHIBITS
83
SIGNATURE
83

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ProAssurance Corporation and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)
(In thousands, except share data)
September 30,
2025 December 31,
2024
Assets
Investments
Fixed maturities, available-for-sale, at fair value (amortized cost, $3,798,274 and $3,803,835, respectively; allowance for expected credit losses, $4,031 and $3,399, respectively)
$ 3,679,182 $ 3,582,207
Fixed maturities, trading, at fair value (cost, $12,304 and $52,493, respectively)
12,390 53,157
Equity investments, at fair value (cost, $120,665 and $145,411, respectively)
110,198 130,158
Short-term investments 291,345 254,922
Business owned life insurance 82,346 80,179
Investment in unconsolidated subsidiaries 253,085 259,538
Other investments (at fair value, $2,137 and $2,077, respectively, otherwise at cost or amortized cost)
9,309 7,266
Total Investments 4,437,855 4,367,427
Cash and cash equivalents 54,457 54,881
Premiums receivable, net (allowance for expected credit losses, $7,957 and $8,141, respectively)
255,677 228,900
Receivable from reinsurers on paid losses and loss adjustment expenses 17,787 18,226
Receivable from reinsurers on unpaid losses and loss adjustment expenses 363,663 409,069
Prepaid reinsurance premiums 39,164 30,623
Deferred policy acquisition costs 59,895 59,026
Deferred tax asset, net 132,952 163,928
Real estate, net 14,873 29,581
Operating lease ROU assets 14,491 16,514
Intangible assets, net 49,822 54,208
Goodwill 5,500 5,500
Other assets 106,037 136,390
Total Assets $ 5,552,173 $ 5,574,273
Liabilities and Shareholders' Equity
Liabilities
Policy liabilities and accruals
Reserve for losses and loss adjustment expenses $ 3,118,937 $ 3,257,696
Unearned premiums 458,376 418,756
Reinsurance premiums payable 26,091 27,289
Total Policy Liabilities and Accruals 3,603,404 3,703,741
Operating lease liabilities 15,321 17,390
Other liabilities 207,673 226,520
Debt less unamortized debt issuance costs
421,523 424,873
Total Liabilities 4,247,921 4,372,524
Shareholders' Equity
Common shares (par value $0.01 per share, 100,000,000 shares authorized, 64,020,611 and 63,763,789 shares issued, respectively)
640 638
Additional paid-in capital 411,877 408,471
Accumulated other comprehensive income (loss) (net of deferred tax expense (benefit) of ($24,560) and ($46,681), respectively)
(90,841) (172,391)
Retained earnings 1,452,270 1,434,725
Treasury shares, at cost (12,606,968 shares as of each respective period end)
(469,694) (469,694)
Total Shareholders' Equity 1,304,252 1,201,749
Total Liabilities and Shareholders' Equity $ 5,552,173 $ 5,574,273
See accompanying notes.
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ProAssurance Corporation and Subsidiaries
Condensed Consolidated Statements of Changes in Capital (Unaudited)
(In thousands)

Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings Treasury Stock Total
Balance at July 1, 2025
$ 640 $ 410,036 $ (116,556) $ 1,450,824 $ (469,694) $ 1,275,250
Share-based compensation — 1,841 — — — 1,841
Other comprehensive income (loss) — — 25,715 — — 25,715
Net income (loss) — — — 1,446 — 1,446
Balance at September 30, 2025
$ 640 $ 411,877 $ (90,841) $ 1,452,270 $ (469,694) $ 1,304,252

Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings Treasury Stock Total
Balance at December 31, 2024 $ 638 $ 408,471 $ (172,391) $ 1,434,725 $ (469,694) $ 1,201,749
Share-based compensation — 6,054 — — — 6,054
Net effect of restricted and performance shares issued 2 (2,648) — — — (2,646)
Other comprehensive income (loss) — — 81,550 — — 81,550
Net income (loss) — — — 17,545 — 17,545
Balance at September 30, 2025 $ 640 $ 411,877 $ (90,841) $ 1,452,270 $ (469,694) $ 1,304,252

Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings Treasury Stock Total
Balance at July 1, 2024
$ 637 $ 405,415 $ (206,037) $ 1,402,115 $ (469,702) $ 1,132,428
Share-based compensation — 1,713 — — — 1,713
Net effect of restricted and performance shares issued 1 (286) — — — (285)
Other comprehensive income (loss) — — 80,929 — — 80,929
Net income (loss) — — — 16,441 — 16,441
Balance at September 30, 2024
$ 638 $ 406,842 $ (125,108) $ 1,418,556 $ (469,702) $ 1,231,226

Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings Treasury Stock Total
Balance at December 31, 2023 $ 636 $ 403,554 $ (204,489) $ 1,381,981 $ (469,702) $ 1,111,980
Common shares issued for compensation — 570 — — — 570
Share-based compensation — 3,993 — — — 3,993
Net effect of restricted and performance shares issued 2 (1,275) — — — (1,273)
Other comprehensive income (loss) — — 79,381 — — 79,381
Net income (loss) — — — 36,575 — 36,575
Balance at September 30, 2024 $ 638 $ 406,842 $ (125,108) $ 1,418,556 $ (469,702) $ 1,231,226
See accompanying notes.
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ProAssurance Corporation and Subsidiaries
Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited)
(In thousands, except per share data)
Three Months Ended September 30 Nine Months Ended September 30

2025 2024 2025 2024
Revenues
Net premiums earned $ 233,404 $ 243,160 $ 702,086 $ 727,176
Net investment income 40,442 37,272 116,326 107,727
Equity in earnings (loss) of unconsolidated subsidiaries 4,731 4,767 13,330 16,383
Net investment gains (losses):
Impairment losses (1,861) (1,801) (1,134) (3,302)
Portion of impairment losses recognized in other comprehensive income (loss) before taxes 605 — 503 102
Net impairment losses recognized in earnings (1,256) (1,801) (631) (3,200)
Other net investment gains (losses) 2,097 4,053 5 8,346
Total net investment gains (losses) 841 2,252 (626) 5,146
Other income (expense) 136 (2,198) (2,731) 3,872
Total revenues 279,554 285,253 828,385 860,304
Expenses
Net losses and loss adjustment expenses 186,199 176,331 536,097 557,025
Underwriting, policy acquisition and operating expenses:
Operating expense 46,817 48,036 146,772 138,544
DPAC amortization 34,601 32,353 98,749 99,864
SPC U.S. federal income tax expense (benefit) 658 377 1,913 1,043
SPC dividend expense (income) 1,674 1,360 3,762 2,479
Interest expense 5,236 5,698 15,620 17,004
Total expenses 275,185 264,155 802,913 815,959
Income (loss) before income taxes 4,369 21,098 25,472 44,345
Provision for income taxes:
Current expense (benefit) 255 881 (742) 901
Deferred expense (benefit) 2,668 3,776 8,669 6,869
Total income tax expense (benefit) 2,923 4,657 7,927 7,770
Net income (loss) 1,446 16,441 17,545 36,575
Other comprehensive income (loss), after tax, net of reclassification adjustments 25,715 80,929 81,550 79,381
Comprehensive income (loss) $ 27,161 $ 97,370 $ 99,095 $ 115,956
Earnings (loss) per share:
Basic $ 0.03 $ 0.32 $ 0.34 $ 0.72
Diluted $ 0.03 $ 0.32 $ 0.34 $ 0.71
Weighted average number of common shares outstanding:
Basic 51,414 51,156 51,317 51,077
Diluted 51,755 51,277 51,627 51,217
See accompanying notes.
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ProAssurance Corporation and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
Nine Months Ended September 30
2025 2024
Operating Activities
Net income (loss) $ 17,545 $ 36,575
Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities:
Depreciation and amortization, net of accretion 10,671 13,645
(Increase) decrease in cash surrender value of BOLI (2,167) (2,087)
Gain on sale of intangible assets (950) —
Gain on sale of capital assets (2,212) —
Net investment (gains) losses 626 (5,146)
Share-based compensation 5,924 3,993
Deferred income tax expense (benefit) 8,669 6,869
Policy acquisition costs, net of amortization (net deferral) (754) (3,491)
Equity in (earnings) loss of unconsolidated subsidiaries (13,330) (16,383)
Distributed earnings from unconsolidated subsidiaries 13,795 12,760
Other, net 2,545 588
Change in:
Premiums receivable (27,315) (29,412)
Reinsurance related assets and liabilities 14,711 2,394
Other assets 15,834 (5,727)
Reserve for losses and loss adjustment expenses (65,192) (61,598)
Unearned premiums 39,574 44,179
Other liabilities (30,450) (7,636)
Net cash provided by (used in) operating activities (12,476) (10,477)
Investing Activities
Purchases of:
Fixed maturities, available-for-sale (664,219) (650,626)
Equity investments (2,750) (1,537)
Other investments (2,470) (18,543)
Investment in unconsolidated subsidiaries (17,087) (17,167)
Proceeds from sales or maturities of:
Fixed maturities, available-for-sale 670,720 551,239
Equity investments 26,539 22,049
Other investments 517 78,283
Net sales or (purchases) of fixed maturities, trading 3,624 (3,267)
Return of invested capital from unconsolidated subsidiaries 23,075 26,056
Net sales or maturities (purchases) of short-term investments (34,803) 9,788
Unsettled security transactions, net change 12,083 4,656
Purchases of capital assets (3,536) (6,655)
Proceeds from sale of capital assets 19,308 —
Proceeds from sale of intangible assets 950 —
Net cash impact of deconsolidation of closed years of account from Lloyd's Syndicates operations (11,102) —
Other 16 —
Net cash provided by (used in) investing activities 20,865 (5,724)
Continued on the following page.
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Nine Months Ended September 30
2025 2024
Continued from the previous page.
Financing Activities
Borrowings (repayments) under Revolving Credit Agreement (4,688) (3,125)
Capital contribution received from (return of capital to) external segregated portfolio cell participants (1,479) —
Other (2,646) (1,274)
Net cash provided by (used in) financing activities (8,813) (4,399)
Increase (decrease) in cash and cash equivalents (424) (20,600)
Cash and cash equivalents at beginning of period 54,881 65,898
Cash and cash equivalents at end of period $ 54,457 $ 45,298
Significant Non-Cash Transactions
Operating lease liabilities arising from obtaining ROU assets $ — $ 2,176
Increase (decrease) in fair value of contingent consideration issued in NORCAL acquisition $ — $ (6,500)
See accompanying notes.
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ProAssurance Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
September 30, 2025

1. Basis of Presentation
The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of ProAssurance Corporation, its wholly owned subsidiaries and VIEs in which ProAssurance is the primary beneficiary (ProAssurance, ProAssurance Group, PRA or the Company). See Note 10 for more information on ProAssurance's VIE interests. The financial statements have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation, consisting of normal recurring adjustments, have been included. ProAssurance’s results for the nine months ended September 30, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025. The accompanying Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes contained in ProAssurance’s December 31, 2024 report on Form 10-K.
ProAssurance operates in four reportable segments as follows: Specialty P&C, Workers' Compensation Insurance, Segregated Portfolio Cell Reinsurance and Corporate. For more information on the Company's segment reporting, including the nature of products and services provided and financial information by segment, refer to Note 12.
Reclassifications
As a result of the segment reorganization in the first quarter of 2025, prior period segment information in Note 12 has been recast to conform to the Company's current segment reporting (see Note 12 for further information).
Accounting Policies
The preparation of financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and disclosures related to these amounts at the date of the financial statements. The Company evaluates these estimates and assumptions on an ongoing basis based on current and historical developments, market conditions, industry trends and other information that the Company believes to be reasonable under the circumstances. The Company can make no assurance that actual results will conform to its estimates and assumptions; reported results of operations may be materially affected by changes in these estimates and assumptions.
The significant accounting policies followed by ProAssurance in making estimates that materially affect financial reporting are summarized in Note 1 of the Notes to Consolidated Financial Statements in ProAssurance’s December 31, 2024 report on Form 10-K.
Accounting Changes Adopted
The Company did not adopt any new accounting standards during the nine months ended September 30, 2025.
Accounting Changes Not Yet Adopted
Disclosure Improvements (ASU 2023-06)
In October 2023, the FASB amended guidance to clarify or improve disclosure and presentation requirements of a variety of topics, which will allow users to more easily compare entities subject to the SEC's existing disclosures with those entities that were not previously subject to the requirements and align the requirements in the Codification with the SEC's regulations. The effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X becomes effective, with early adoption prohibited. ProAssurance is currently evaluating the effect the updated guidance will have on the Company's financial statement disclosures.
Improvements to Income Tax Disclosures (ASU 2023-09)
Effective for fiscal years beginning after December 15, 2024, the FASB amended disclosure requirements to provide greater transparency on income tax disclosures, including the disaggregation of existing disclosures related to the tax rate reconciliation and income taxes paid. ProAssurance is currently evaluating the effect the updated guidance will have on the Company's financial statement disclosures. Since these new requirements only impact disclosures, there will be no impact on the Company's results of operations, financial position or cash flows.
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ProAssurance Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
September 30, 2025
Disaggregation of Income Statement Expenses (ASU 2024-03)
Effective for fiscal years beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, the FASB issued guidance to improve disclosures about the Company’s expenses by requiring more detailed information about certain expenses (employee compensation, depreciation and intangible asset amortization) included within the Condensed Consolidated Statement of Income and Comprehensive Income captions. ProAssurance is currently evaluating the effect the updated guidance will have on the Company's financial statement disclosures.
Business Combinations and Consolidation (ASU 2025-03)
Effective for fiscal years beginning after December 15, 2026, the FASB issued guidance to establish more consistent requirements for determining the accounting acquirer in the acquisition of a VIE. ProAssurance is currently evaluating the effect the updated guidance will have on the Company's results of operations, financial position and cash flows.
Targeted Improvements to the Accounting for Internal-Use Software (ASU 2025-06)
Effective for fiscal years beginning after December 15, 2027, the FASB amended guidance on accounting for internal-use software and updated disclosure requirements for internal-use software and related amortization. ProAssurance is currently evaluating the effect the updated guidance will have on the Company's results of operations, financial position and cash flows as well as the Company's financial statement disclosures.
Agreement and Plan of Merger
On March 19, 2025, ProAssurance entered into an Agreement and Plan of Merger (the “Merger Agreement”) with The Doctors Company, a California-domiciled reciprocal inter-insurance exchange, and Jackson Acquisition Corporation, a Delaware corporation and a wholly owned subsidiary of The Doctors Company (“Merger Sub”), pursuant to which, on the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into ProAssurance (the “Merger”). ProAssurance will continue as the surviving corporation in the Merger as a wholly owned subsidiary of The Doctors Company. The Board has approved the Merger Agreement and the transactions contemplated thereby, including the Merger.
On the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the Merger (the “Effective Time”), and as a result of the Merger, each share of common stock, $0.01 par value, of ProAssurance common stock that is issued and outstanding immediately prior to the Effective Time (other than Excluded Shares as defined in the Merger Agreement) will be converted into the right to receive $25.00 in cash per share (the “Merger Consideration”).
In addition, pursuant to the Merger Agreement, as of the Effective Time, (i) each restricted stock unit payable in shares of ProAssurance common stock that is issued and outstanding immediately prior to the Effective Time will automatically vest and be converted into the right to receive an amount in cash (less any applicable withholding taxes payable in respect thereto) equal to the Merger Consideration, (ii) each outstanding performance share payable in shares of ProAssurance common stock (determined based on deemed target level performance) will automatically vest and be converted into the right to receive an amount of cash (less any applicable withholding taxes payable in respect thereto) equal to the Merger Consideration and (iii) all amounts held in deferred compensation accounts representing awarded shares of ProAssurance common stock that are deferred under ProAssurance’s Director Deferred Stock Compensation Plan and any accrued dividend equivalents in such deferred compensation accounts that have been converted into such shares, will automatically convert into the right to receive an amount of cash equal to the Merger Consideration for each such share.
In connection with the Merger, the Company expects to incur significant expenses. However, an estimate of those expenses cannot be made at this time. During the three and nine months ended September 30, 2025, pre-tax transaction-related costs of approximately $3.0 million and $14.6 million, respectively, were included as a component of consolidated operating expense on the Condensed Consolidated Statements of Income and Comprehensive Income.
On June 24, 2025, ProAssurance held a special meeting of stockholders at which holders of ProAssurance’s common stock approved each of the proposals voted on at the meeting relating to the transactions contemplated by the Merger Agreement. On July 2, 2025, the U.S. Federal Trade Commission granted early termination of the waiting period under the Hart-Scott Rodino Antitrust Improvements Act of 1976 with respect to the Merger.
The closing of the proposed Merger remains subject to other customary closing conditions, including approval from insurance regulators in the jurisdictions where the Company’s operating subsidiaries are domiciled. As of November 4, 2025, The Doctors Company has received final approval from insurance regulators in Alabama, the District of Columbia, Illinois, Missouri and Vermont. Review of the proposed Merger by insurance regulators remains pending in California, Pennsylvania and Texas. The timing for completion of the pending reviews is uncertain and not within the Company’s control, but in light of
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ProAssurance Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
September 30, 2025
progress made toward satisfaction of closing conditions, the Company currently anticipates closing the transaction by June 30, 2026.
Disposal of Long-Lived Asset
During the first quarter of 2025, ProAssurance sold the Franklin, TN property to an unrelated third party, recognizing a gain of $2.2 million in the Condensed Consolidated Statements of Income and Comprehensive Income as a component of other income (expense). Proceeds, net of closing costs, of $19.3 million from the sale of the property are included in investing activities on the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2025. In accordance with ASC 360, depreciation was not recorded for the Franklin, TN property during the first quarter of 2025 once the asset was classified as held for sale. See Note 1 of the Notes to Consolidated Financial Statements in ProAssurance’s December 31, 2024 report on Form 10-K for the Company's accounting policy regarding real estate.
2. Fair Value Measurement
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three level hierarchy has been established for valuing assets and liabilities based on how transparent (observable) the inputs are that are used to determine fair value, with the inputs considered most observable categorized as Level 1 and those that are the least observable categorized as Level 3. Hierarchy levels are defined as follows:
Level 1: quoted (unadjusted) market prices in active markets for identical assets and liabilities. For ProAssurance, Level 1 inputs are generally quotes for securities actively traded in exchange or over-the-counter markets.
Level 2: market data obtained from sources independent of the reporting entity (observable inputs). For ProAssurance, Level 2 inputs generally include quoted prices in markets that are not active, quoted prices for similar assets or liabilities, and results from pricing models that use observable inputs such as interest rates and yield curves that are generally available at commonly quoted intervals.
Level 3: the reporting entity’s own assumptions about market participant assumptions based on the best information available in the circumstances (non-observable inputs). For ProAssurance, Level 3 inputs are used in situations where little or no Level 1 or 2 inputs are available or are inappropriate given the particular circumstances. Level 3 inputs include results from pricing models for which some or all of the inputs are not observable, discounted cash flow methodologies, single non-binding broker quotes and adjustments to externally quoted prices that are based on management judgment or estimation.
Fair values of assets measured at fair value on a recurring basis as of September 30, 2025 and December 31, 2024 are shown in the following tables. Where applicable, the tables also indicate the fair value hierarchy of the valuation techniques utilized to determine those fair values. For some assets, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. When this is the case, the asset is categorized based on the level of the most significant input to the fair value measurement. Assessments of the significance of a particular input to the fair value measurement require judgment and consideration of factors specific to the assets being valued.
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ProAssurance Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
September 30, 2025
September 30, 2025
Fair Value Measurements Using Total
(In thousands) Level 1 Level 2 Level 3 Fair Value
Assets:
Fixed maturities, available-for-sale
U.S. Treasury obligations $ — $ 248,450 $ — $ 248,450
U.S. Government-sponsored enterprise obligations — 10,026 — 10,026
State and municipal bonds — 451,391 — 451,391
Corporate debt, multiple observable inputs — 1,666,329 — 1,666,329
Corporate debt, limited observable inputs — — 77,906 77,906
Residential mortgage-backed securities — 552,081 — 552,081
Agency commercial mortgage-backed securities — 5,230 — 5,230
Other commercial mortgage-backed securities — 205,798 205,798
Other asset-backed securities — 453,736 8,235 461,971
Fixed maturities, trading — 12,390 — 12,390
Equity investments
Financial 9,532 2,358 — 11,890
Utilities/Energy 1,030 — — 1,030
Industrial — — 4,526 4,526
Bond funds 81,215 — — 81,215
All other 11,537 — — 11,537
Short-term investments 223,597 67,748 — 291,345
Other investments — 1,616 521 2,137
Other assets — 734 — 734
Total assets categorized within the fair value hierarchy $ 326,911 $ 3,677,887 $ 91,188 4,095,986
Assets carried at NAV, which approximates fair value and which are not categorized within the fair value hierarchy, reported as a part of:
Investment in unconsolidated subsidiaries 220,532
Total assets at fair value $ 4,316,518
Liabilities:
Other liabilities $ 1,650 $ 1,540 $ — $ 3,190
Total liabilities categorized within the fair value hierarchy $ 1,650 $ 1,540 $ — $ 3,190
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ProAssurance Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
September 30, 2025
December 31, 2024
Fair Value Measurements Using Total
(In thousands) Level 1 Level 2 Level 3 Fair Value
Assets:
Fixed maturities, available-for-sale
U.S. Treasury obligations $ — $ 243,903 $ — $ 243,903
U.S. Government-sponsored enterprise obligations — 14,894 — 14,894
State and municipal bonds — 446,601 — 446,601
Corporate debt, multiple observable inputs — 1,646,713 — 1,646,713
Corporate debt, limited observable inputs — — 81,062 81,062
Residential mortgage-backed securities — 478,799 — 478,799
Agency commercial mortgage-backed securities — 6,727 — 6,727
Other commercial mortgage-backed securities — 201,786 — 201,786
Other asset-backed securities — 457,948 3,774 461,722
Fixed maturities, trading — 53,157 — 53,157
Equity investments
Financial 9,006 2,310 273 11,589
Utilities/Energy 724 — — 724
Industrial — — 5,233 5,233
Bond funds 101,243 — — 101,243
All other 11,369 — — 11,369
Short-term investments 185,492 69,430 — 254,922
Other investments — 1,577 500 2,077
Other assets — 6,094 — 6,094
Total assets categorized within the fair value hierarchy $ 307,834 $ 3,629,939 $ 90,842 4,028,615
Assets carried at NAV, which approximates fair value and which are not categorized within the fair value hierarchy, reported as a part of:
Investment in unconsolidated subsidiaries 226,269
Total assets at fair value $ 4,254,884
Liabilities:
Other liabilities $ 6,680 $ — $ — $ 6,680
Total liabilities categorized within the fair value hierarchy $ 6,680 $ — $ — $ 6,680
Level 2 Valuations
Other than as described below, see Note 2 of the Notes to Consolidated Financial Statements in ProAssurance’s December 31, 2024 report on Form 10-K for a summary description of the valuation methodologies used regarding securities in the Level 2 category, by security type.

Level 2 Valuation Methodologies
Other liabilities consisted of foreign currency forward contract derivative instruments, which are discussed in Note 8, valued using a model which considers the forward yield curves and volatilities from other instruments with similar maturities, strike prices and durations.
Level 3 Valuations
See Note 2 of the Notes to Consolidated Financial Statements in ProAssurance’s December 31, 2024 report on Form 10-K for a summary description of the valuation methodologies used regarding securities in the Level 3 category, by security type.
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ProAssurance Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
September 30, 2025
Quantitative Information Regarding Level 3 Valuations
Below is quantitative information regarding securities in the Level 3 category, by security type:
Fair Value at
($ in thousands) September 30, 2025 December 31, 2024 Valuation Technique Unobservable Input Range
(Weighted Average)
Assets:
Corporate debt, limited observable inputs $77,906 $81,062 Market Comparable
Securities Comparability Adjustment
0% - 5% (2.5%)
Discounted Cash Flows Comparability Adjustment
0% - 5% (2.5%)
Other asset-backed securities $8,235 $3,774 Market Comparable
Securities Comparability Adjustment
0% - 5% (2.5%)
Discounted Cash Flows Comparability Adjustment
0% - 5% (2.5%)
Equity investments $4,526 $5,506 Discounted Cash Flows Comparability Adjustment
0% - 10% (5%)
Other investments $521 $500 Discounted Cash Flows Comparability Adjustment
0% - 10% (5%)
The significant unobservable inputs used in the fair value measurement of the above listed securities were the valuations of comparable securities with similar issuers, credit quality and maturity. Changes in the availability of comparable securities could result in changes in the fair value measurements.
Fair Value Measurements - Level 3 Assets & Liabilities
The following tables present summary information regarding changes in the fair value of assets and liabilities measured using Level 3 inputs.
September 30, 2025
Level 3 Fair Value Measurements – Assets
(In thousands) Corporate Debt Asset-backed Securities Equity Investments Other Investments Total
Balance, June 30, 2025 $ 80,344 $ 9,449 $ 4,526 $ 1,021 $ 95,340
Total gains (losses) realized and unrealized:
Included in earnings, as a part of:
Net investment income (loss) 24 3 — — 27
Net investment gains (losses) — — (590) — (590)
Included in other comprehensive income (loss) 224 98 — — 322
Purchases
2,734 3,500 590 — 6,824
Sales
(5,444) (49) — (500) (5,993)
Transfers in
901 — — — 901
Transfers out
(877) (4,766) — — (5,643)
Balance, September 30, 2025 $ 77,906 $ 8,235 $ 4,526 $ 521 $ 91,188
Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets held at period-end
$ — $ — $ (590) $ — $ (590)
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ProAssurance Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
September 30, 2025
September 30, 2025

Level 3 Fair Value Measurements - Assets
(In thousands) Corporate Debt Asset-backed Securities Equity Investments Other Investments Total Assets
Balance, December 31, 2024 $ 81,062 $ 3,774 $ 5,506 $ 500 $ 90,842
Total gains (losses) realized and unrealized:
Included in earnings, as a part of:
Net investment income (loss) 24 3 — — 27
Net investment gains (losses) (1,727) — (1,570) — (3,297)
Included in other comprehensive income (loss) 692 69 — — 761
Purchases 12,533 8,321 590 521 21,965
Sales (9,831) (316) — (500) (10,647)
Transfers in 6,968 2,198 — — 9,166
Transfers out (11,815) (5,814) — — (17,629)
Balance, September 30, 2025 $ 77,906 $ 8,235 $ 4,526 $ 521 $ 91,188
Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets held at period-end
$ — $ — $ (1,278) $ — $ (1,278)
September 30, 2024
Level 3 Fair Value Measurements – Assets
(In thousands) Corporate Debt Asset-backed Securities Equity Investments Other Investments
Total Assets
Balance, June 30, 2024
$ 66,951 $ 724 $ 4,238 $ 500 $ 72,413
Total gains (losses) realized and unrealized:
Included in earnings, as a part of:
Net investment income — 2 — — 2
Net investment gains (losses) — — (68) — (68)
Included in other comprehensive income (loss) 95 — — — 95
Purchases 5,133 1,998 319 — 7,450
Sales (958) — — — (958)
Transfers in 3,587 — — — 3,587
Balance, September 30, 2024
$ 74,808 $ 2,724 $ 4,489 $ 500 $ 82,521
Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets and liabilities held at period-end
$ — $ — $ (68) $ — $ (68)
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ProAssurance Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
September 30, 2025
September 30, 2024
Level 3 Fair Value Measurements
Assets Liabilities
(In thousands) Corporate Debt Asset-backed Securities Equity Investments Other Investments Total Assets Other Liabilities Total Liabilities
Balance, December 31, 2023 $ 82,377 $ 4,414 $ 5,237 $ 5,126 $ 97,154 $ (6,500) $ (6,500)
Total gains (losses) realized and unrealized:
Included in earnings, as a part of:
Net investment income (loss) — 2 — — 2 — —
Net investment gains (losses) — — (1,067) 98 (969) 6,500 6,500
Included in other comprehensive income (loss) (49) (22) — — (71) — —
Purchases 11,901 3,198 319 — 15,418 — —
Sales (2,497) (217) — (252) (2,966) — —
Transfers in 3,587 — — — 3,587 — —
Transfers out (20,511) (4,651) — (4,472) (29,634) — —
Balance, September 30, 2024 $ 74,808 $ 2,724 $ 4,489 $ 500 $ 82,521 $ — $ —
Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets and liabilities held at period-end $ — $ — $ (1,067) $ 88 $ (979) $ — $ —
Transfers
Transfers shown in the preceding Level 3 tables were as of the end of the period in which the transfer occurred. All transfers were to or from Level 2.
All transfers in and out of Level 3 during the three and nine months ended September 30, 2025 and 2024 related to securities held for which the level of market activity for identical or nearly identical securities varies from period to period. The securities were valued using multiple observable inputs when those inputs were available; otherwise the securities were valued using limited observable inputs.
Fair Values Not Categorized
At September 30, 2025 and December 31, 2024, certain LPs/LLCs and investment funds measure fund assets at fair value on a recurring basis and provide a NAV for ProAssurance's interest. The carrying value of these interests is based on the NAV provided and was considered to approximate the fair value of the interests. For investment in unconsolidated subsidiaries, ProAssurance recognizes any changes in the NAV of its interests in equity in earnings (loss) of unconsolidated subsidiaries during the period of change. In accordance with GAAP, the fair value of these investments was not classified within the fair value hierarchy. The amount of ProAssurance's unfunded contractual commitments related to these investments as of September 30, 2025 and fair values of these investments as of September 30, 2025 and December 31, 2024 were as follows:
Unfunded
Contractual Commitments Fair Value
(In thousands) September 30,
2025 September 30,
2025 December 31,
2024
Investment in unconsolidated subsidiaries:
Private debt funds (1)
$3,799 $ 11,823 $ 14,190
Long/short equity funds (2)
None — 4,246
Non-public equity funds (3)
$30,413 104,488 111,441
Credit funds (4)
$55,793 52,696 45,134
Strategy focused funds (5)
$62,270 51,525 51,258
Total investments carried at NAV $ 220,532 $ 226,269
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ProAssurance Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
September 30, 2025
Below is additional information regarding each of the investments listed in the table above as of September 30, 2025.
(1)This investment is comprised of interests in two unrelated LP funds that are structured to provide interest distributions primarily through diversified portfolios of private debt instruments. One LP allows redemption by special consent, while the other does not permit redemption. Income and capital are to be periodically distributed at the discretion of the LPs over an anticipated time frame that spans from three to eight years.
(2)This investment is comprised of one LP fund, which holds long and short publicly traded securities that will passively generate income. This fund was fully redeemed in the third quarter of 2025.
(3)This investment is comprised of interests in multiple unrelated LP funds, each structured to provide capital appreciation through diversified investments in private equity, which can include investments in buyout, venture capital, debt including senior, second lien and mezzanine, distressed debt, collateralized loan obligations and other private equity-oriented LPs. Two of the LPs allow redemption by terms set forth in the LP agreements; the others do not permit redemption. Income and capital are to be periodically distributed at the discretion of the LP over time frames that are anticipated to span up to ten years.
(4)This investment is comprised of multiple unrelated LP funds. Three funds seek to obtain superior risk-adjusted absolute returns through a diversified portfolio of debt securities, including bonds, loans and other asset-backed instruments. The remaining funds focus on private middle market company mezzanine and senior secured loans, opportunities across the credit spectrum, mortgage backed-loans, as well as various types of loan-backed investments. One fund allows redemptions at any quarter-end with prior notice requirements of 180 days, while another fund allows for redemptions with consent of the General Partner. The remaining funds do not allow redemptions. For the funds that do not allow redemptions, income and capital are to be periodically distributed at the discretion of the LP over time frames throughout the remaining life of the funds.
(5)This investment is comprised of multiple unrelated LPs/LLCs funds. One fund is an LLC focused on investing in North American consumer products companies, comprised of equity and equity-related securities, as well as debt instruments. A second fund is focused on aircraft investments, along with components and assets related to aircraft. A third fund is an LLC focused on acquiring ownership stakes in insurance agencies. For all three funds, redemptions are not permitted. The remaining funds are real estate focused LPs, three of which allow for redemption with prior notice.
ProAssurance may not sell, transfer or assign its interest in any of the above LPs/LLCs without special consent from the LPs/LLCs.
Nonrecurring Fair Value Measurement
ProAssurance did not have any assets or liabilities that were measured at fair value on a nonrecurring basis at September 30, 2025 or December 31, 2024.
Financial Instruments - Methodologies Other Than Fair Value
The following table provides the estimated fair value of the Company's financial instruments that, in accordance with GAAP for the type of investment, are measured using a methodology other than fair value. Fair values provided primarily fall within the Level 3 fair value category.
September 30, 2025 December 31, 2024
(In thousands) Carrying
Value Fair
Value Carrying
Value Fair
Value
Financial assets:
BOLI $ 82,346 $ 82,346 $ 80,179 $ 80,179
Other investments $ 7,172 $ 7,172 $ 5,189 $ 5,189
Other assets $ 23,151 $ 23,151 $ 34,793 $ 34,793
Financial liabilities:
Revolving Credit Agreement* $ 125,000 $ 125,000 $ 125,000 $ 125,000
Term Loan*
$ 115,625 $ 115,625 $ 120,313 $ 120,313
Contribution Certificates $ 182,158 $ 165,112 $ 181,163 $ 152,564
Other liabilities $ 28,955 $ 28,955 $ 33,793 $ 33,793
* Carrying value excludes unamortized debt issuance costs.
The fair value of the BOLI was equal to the cash surrender value associated with the policies on the valuation date.
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ProAssurance Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
September 30, 2025
Other investments listed in the table above include FHLB common stock carried at cost and an annuity investment carried at amortized cost. Two of ProAssurance's insurance subsidiaries are members of an FHLB. The estimated fair value of the FHLB common stock was based on the amount the subsidiaries would receive if their memberships were canceled, as the memberships cannot be sold. The fair value of the annuity represents the present value of the expected future cash flows discounted using a rate available in active markets for similarly structured instruments.
Other assets and other liabilities primarily consisted of related investment assets and liabilities associated with funded deferred compensation agreements. The fair value of the funded deferred compensation assets was based upon quoted market prices, which is categorized as a Level 1 valuation, and had a fair value of $23.1 million and $34.1 million at September 30, 2025 and December 31, 2024, respectively. Other assets also included an unsecured note receivable. The fair value of the note receivable was based on the present value of expected cash flows from the note receivable, discounted at market rates on the valuation date for receivables with similar credit standings and similar payment structures. Other liabilities consisted of liabilities associated with funded deferred compensation agreements. The reported balance is determined based on the amount of elective deferrals and employer contributions adjusted for periodic changes in the fair value of the participant balances based on the performance of the funds selected by the participants and had a fair value of $29.0 million and $33.8 million at September 30, 2025 and December 31, 2024, respectively.
The fair value of the debt was estimated based on the present value of expected future cash outflows, discounted at rates available on the valuation date for similar debt issued by entities with a similar credit standing to ProAssurance.
3. Investments
Available-for-sale fixed maturities at September 30, 2025 and December 31, 2024 included the following:
September 30, 2025
(In thousands) Amortized
Cost Allowance for Expected Credit Losses Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value
Fixed maturities, available-for-sale
U.S. Treasury obligations $ 254,416 $ — $ 833 $ 6,799 $ 248,450
U.S. Government-sponsored enterprise obligations 10,361 — 7 342 10,026
State and municipal bonds 462,226 — 4,200 15,035 451,391
Corporate debt 1,793,841 3,513 15,344 61,437 1,744,235
Residential mortgage-backed securities 593,747 185 4,515 45,996 552,081
Agency commercial mortgage-backed securities 5,940 — 10 720 5,230
Other commercial mortgage-backed securities 212,742 62 881 7,763 205,798
Other asset-backed securities 465,001 271 3,976 6,735 461,971
$ 3,798,274 $ 4,031 $ 29,766 $ 144,827 $ 3,679,182
December 31, 2024
(In thousands) Amortized
Cost Allowance for Expected Credit Losses Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value
Fixed maturities, available-for-sale
U.S. Treasury obligations $ 256,939 $ — $ 107 $ 13,143 $ 243,903
U.S. Government-sponsored enterprise obligations 15,586 — — 692 14,894
State and municipal bonds 470,974 — 1,135 25,508 446,601
Corporate debt 1,833,207 2,608 4,241 107,065 1,727,775
Residential mortgage-backed securities 536,194 197 1,628 58,826 478,799
Agency commercial mortgage-backed securities 7,600 — — 873 6,727
Other commercial mortgage-backed securities 214,019 406 439 12,266 201,786
Other asset-backed securities 469,316 188 1,725 9,131 461,722
$ 3,803,835 $ 3,399 $ 9,275 $ 227,504 $ 3,582,207
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ProAssurance Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
September 30, 2025
The recorded cost basis and estimated fair value of available-for-sale fixed maturities at September 30, 2025, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
(In thousands) Amortized
Cost Due in one
year or less Due after
one year
through
five years Due after
five years
through
ten years Due after
ten years Total Fair
Value
Fixed maturities, available-for-sale
U.S. Treasury obligations $ 254,416 $ 96,671 $ 117,090 $ 32,067 $ 2,622 $ 248,450
U.S. Government-sponsored enterprise obligations 10,361 1,032 6,265 756 1,973 10,026
State and municipal bonds 462,226 31,578 151,503 144,730 123,580 451,391
Corporate debt 1,793,841 185,911 867,201 544,896 146,227 1,744,235
Residential mortgage-backed securities 593,747 552,081
Agency commercial mortgage-backed securities 5,940 5,230
Other commercial mortgage-backed securities 212,742 205,798
Other asset-backed securities 465,001 461,971
$ 3,798,274 $ 3,679,182
Excluding obligations of the U.S. Government, U.S. Government-sponsored enterprises and a U.S. Government obligations money market fund, no investment in any entity or its affiliates exceeded 10% of shareholders’ equity at September 30, 2025.
Cash and securities with a carrying value of $53.2 million at September 30, 2025 were on deposit with various state insurance departments to meet regulatory requirements. ProAssurance also held securities with a carrying value of $68.8 million at September 30, 2025 that are pledged as collateral security for advances under the Company's borrowing relationships with FHLBs.
As a member of Lloyd's, ProAssurance is required to maintain capital at Lloyd's, referred to as FAL, to support the Company's previous participation in underwriting years that remain open at Syndicate 1729. At September 30, 2025, the fair value of ProAssurance's FAL investments was $17.4 million and were comprised of cash and cash equivalents and, to a lesser extent, investment securities, primarily available-for-sale fixed maturities, on deposit with Lloyd's, in order to satisfy these FAL requirements.
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ProAssurance Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
September 30, 2025
Investments Held in a Loss Position
The following tables provide summarized information with respect to investments held in an unrealized loss position at September 30, 2025 and December 31, 2024, including the length of time the investment had been held in a continuous unrealized loss position.
September 30, 2025
Total Less than 12 months 12 months or longer
Fair Unrealized Fair Unrealized Fair Unrealized
(In thousands) Value Loss Value Loss Value Loss
Fixed maturities, available-for-sale
U.S. Treasury obligations $ 190,822 $ 6,799 $ 13,661 $ 972 $ 177,161 $ 5,827
U.S. Government-sponsored enterprise obligations 8,996 342 — — 8,996 342
State and municipal bonds 288,050 15,035 40,373 1,840 247,677 13,195
Corporate debt 1,069,619 61,437 154,904 10,057 914,715 51,380
Residential mortgage-backed securities 315,729 45,996 76,550 4,951 239,179 41,045
Agency commercial mortgage-backed securities 4,781 720 800 122 3,981 598
Other commercial mortgage-backed securities 124,738 7,763 25,528 325 99,210 7,438
Other asset-backed securities 129,095 6,735 36,326 1,179 92,769 5,556
$ 2,131,830 $ 144,827 $ 348,142 $ 19,446 $ 1,783,688 $ 125,381

December 31, 2024
Total Less than 12 months 12 months or longer
Fair Unrealized Fair Unrealized Fair Unrealized
(In thousands) Value Loss Value Loss Value Loss
Fixed maturities, available-for-sale
U.S. Treasury obligations $ 213,505 $ 13,143 $ 33,822 $ 1,561 $ 179,683 $ 11,582
U.S. Government-sponsored enterprise obligations 14,894 692 2,603 69 12,291 623
State and municipal bonds 378,425 25,508 82,312 2,261 296,113 23,247
Corporate debt 1,350,139 107,065 222,614 9,593 1,127,525 97,472
Residential mortgage-backed securities 378,461 58,826 118,908 3,810 259,553 55,016
Agency commercial mortgage-backed securities 6,727 873 426 8 6,301 865
Other commercial mortgage-backed securities 151,386 12,266 17,337 188 134,049 12,078
Other asset-backed securities 202,517 9,131 65,870 560 136,647 8,571
$ 2,696,054 $ 227,504 $ 543,892 $ 18,050 $ 2,152,162 $ 209,454
As of September 30, 2025, excluding U.S. Government or U.S. Government-sponsored enterprise obligations, there were 1,806 debt securities (45.0% of all available-for-sale fixed maturity securities held) in an unrealized loss position representing 1,054 issuers. The greatest and second greatest unrealized loss positions among those securities were approximately $4.5 million and $2.7 million, respectively. The securities were evaluated for impairment as of September 30, 2025.
As of December 31, 2024, excluding U.S. Government or U.S. Government-sponsored enterprise obligations, there were 2,350 debt securities (58.7% of all available-for-sale fixed maturity securities held) in an unrealized loss position representing 1,235 issuers. The greatest and second greatest unrealized loss positions among those securities were approximately $5.2 million and $3.4 million, respectively. The securities were evaluated for impairment as of December 31, 2024.
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ProAssurance Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
September 30, 2025
Each quarter, ProAssurance performs a detailed analysis for the purpose of assessing whether any of the securities it holds in an unrealized loss position has suffered an impairment due to credit or non-credit factors. A detailed discussion of the factors considered in the assessment is included in Note 1 of the Notes to Consolidated Financial Statements in ProAssurance's December 31, 2024 report on Form 10-K.
Fixed maturity securities held in an unrealized loss position at September 30, 2025, excluding asset-backed securities, have paid all scheduled contractual payments and are expected to continue. Expected future cash flows of asset-backed securities, excluding those issued by GNMA, FNMA and FHLMC, held in an unrealized loss position were estimated as part of the September 30, 2025 impairment evaluation using the most recently available six-month historical performance data for the collateral (loans) underlying the security or, if historical data was not available, sector based assumptions, and equaled or exceeded the current amortized cost basis of the security.
The following tables present a roll forward of the allowance for expected credit losses on available-for-sale fixed maturities for the three and nine months ended September 30, 2025 and 2024.

Three Months Ended September 30, 2025
(In thousands) Corporate Debt Residential mortgage-backed securities Other commercial mortgage-backed securities Other asset-backed securities Total
Balance, at July 1, 2025 $ 2,250 $ 188 $ 62 $ 274 $ 2,774
Additional credit losses related to securities for which:
No allowance for credit losses has been previously recognized
1,263 — — — 1,263
Reductions related to:
Securities sold during the period — (3) — (3) (6)
Balance, at September 30, 2025 $ 3,513 $ 185 $ 62 $ 271 $ 4,031
Nine Months Ended September 30, 2025
(In thousands) Corporate Debt Residential mortgage-backed securities Other commercial mortgage-backed securities Other asset-backed securities Total
Balance, at December 31, 2024 $ 2,608 $ 197 $ 406 $ 188 $ 3,399
Additional credit losses related to securities for which:
No allowance for credit losses has been previously recognized 1,263 — 62 91 1,416
An allowance for credit losses was recorded in a previous period 1,727 — — — 1,727
Reductions related to:
Securities sold during the period (2,085) (12) (406) (8) (2,511)
Balance, at September 30, 2025 $ 3,513 $ 185 $ 62 $ 271 $ 4,031
Three Months Ended September 30, 2024
(In thousands) Corporate Debt Residential mortgage-backed securities Other commercial mortgage-backed securities Other asset-backed securities Total
Balance, at July 1, 2024 $ 1,210 $ 203 $ — $ 189 $ 1,602
Additional credit losses related to securities for which:
No allowance for credit losses has been previously recognized 1,398 — 406 — 1,804
Reductions related to:
Securities sold during the period — (2) — (1) (3)
Balance, at September 30, 2024 $ 2,608 $ 201 $ 406 $ 188 $ 3,403
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Table of Contents
ProAssurance Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
September 30, 2025
Nine Months Ended September 30, 2024
(In thousands) Corporate Debt Residential mortgage-backed securities Other commercial mortgage-backed securities Other asset-backed securities Total
Balance, at December 31, 2023 $ — $ 211 $ 151 $ 193 $ 555
Additional credit losses related to securities for which:
No allowance for credit losses has been previously recognized 2,138 — 406 — 2,544
An allowance for credit losses was recorded in a previous period 470 — — — 470
Reductions related to:
Securities sold during the period — (10) (151) (5) (166)
Balance, at September 30, 2024 $ 2,608 $ 201 $ 406 $ 188 $ 3,403
Other information regarding sales and purchases of fixed maturity available-for-sale securities is as follows:
Three Months Ended September 30 Nine Months Ended September 30
(In millions) 2025 2024 2025 2024
Proceeds from sales (exclusive of maturities and paydowns) $ 13.1 $ 39.4 $ 175.2 $ 97.7
Purchases $ 188.6 $ 186.5 $ 664.2 $ 650.6
Net Investment Income
Net investment income (loss) by investment category was as follows:
Three Months Ended
September 30 Nine Months Ended
September 30
(In thousands) 2025 2024 2025 2024
Fixed maturities $ 37,199 $ 34,092 $ 108,826 $ 99,150
Equities 1,027 1,197 3,142 3,253
Short-term investments, including Other 3,325 3,167 8,381 9,718
BOLI 927 1,101 2,166 2,087
Investment fees and expenses (2,036) (2,285) (6,189) (6,481)
Net investment income $ 40,442 $ 37,272 $ 116,326 $ 107,727
Investment in Unconsolidated Subsidiaries
ProAssurance's investment in unconsolidated subsidiaries was as follows:
September 30, 2025 Carrying Value
(In thousands) Percentage
Ownership September 30,
2025 December 31,
2024
Qualified affordable housing project tax credit partnerships See below $ 259 $ 247
All other investments, primarily investment fund LPs/LLCs
See below 252,826 259,291
$ 253,085 $ 259,538
Qualified affordable housing project tax credit partnership interests held by ProAssurance generate investment returns by providing tax benefits to fund investors in the form of tax credits and project operating losses. The carrying value of these investments reflects ProAssurance's total commitments (both funded and unfunded) to the partnerships, less any amortization. At September 30, 2025 and December 31, 2024, ProAssurance did not have an ownership percentage greater than 20% in any tax credit partnership interests. Since ProAssurance has the ability to exert influence over the partnerships but does not control them, all are accounted for using the equity method. See further discussion of the entities in which ProAssurance holds passive interests in Note 10.
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ProAssurance Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
September 30, 2025
ProAssurance holds interests in investment fund LPs/LLCs and other equity method investments and LPs/LLCs which are not considered to be investment funds. ProAssurance's ownership percentage relative to five of the LPs/LLCs is greater than 25% at September 30, 2025 and December 31, 2024 which is likely to be reduced as the funds mature and other investors participate in the funds; these investments had a carrying value of $25.0 million at September 30, 2025 and $18.0 million at December 31, 2024. ProAssurance's ownership percentage relative to the remaining investments and LPs/LLCs is less than 25%; these interests had a carrying value of $227.8 million at September 30, 2025 and $241.3 million at December 31, 2024. ProAssurance does not have the ability to exert control over any of these funds.
Equity in Earnings (Loss) of Unconsolidated Subsidiaries
Equity in earnings (loss) of unconsolidated subsidiaries included losses from tax credit partnerships. Investment results recorded reflect ProAssurance's allocable portion of partnership operating results. Tax credits reduce income tax expense in the period they are utilized. The results recorded and tax credits recognized related to ProAssurance's tax credit partnership investments were as follows:
Three Months Ended
September 30 Nine Months Ended
September 30
(In thousands) 2025 2024 2025 2024
Qualified affordable housing project tax credit partnerships
Losses (gains) recorded
$ (777) $ 451 $ (782) $ 163
Tax credits recognized $ — $ 8 $ 11 $ 24
ProAssurance accounts for its tax credit partnership investments under the equity method of accounting and records its allocable portion of the operating losses of the underlying properties based on estimates provided by the partnerships. For the Company's qualified affordable housing project tax credit partnerships, it adjusts its estimates of their allocable portion of operating losses periodically as actual operating results of the underlying properties become available. The primary benefits of tax credits and tax-deductible operating losses from the historic tax credit partnerships are earned in a short period with potential for additional cash flows extending over several years. For the three and nine months ended September 30, 2025 and 2024, the Company generated a nominal amount of tax credits from its tax credit partnership investments, which were deferred and are expected to be utilized in future periods. As of September 30, 2025, the Company had approximately $47.4 million of available tax credit carryforwards generated from its investments in tax credit partnerships which they expect to utilize in future periods.
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Notes to Condensed Consolidated Financial Statements (Unaudited)
September 30, 2025
Net Investment Gains (Losses)
Realized investment gains and losses are recognized on the first-in, first-out basis. The following table provides detailed information regarding net investment gains (losses):
Three Months Ended
September 30 Nine Months Ended
September 30
(In thousands) 2025 2024 2025 2024
Total impairment losses:
Corporate debt $ (1,868) $ (1,398) $ (1,408) $ (2,710)
Asset-backed securities 7 (403) 274 (592)
Portion of impairment losses recognized in other comprehensive income before taxes:
Corporate debt 605 — 503 102
Net impairment losses recognized in earnings
(1,256) (1,801) (631) (3,200)
Gross realized gains, available-for-sale fixed maturities 248 484 1,352 1,156
Gross realized (losses), available-for-sale fixed maturities (238) (1,567) (5,179) (3,636)
Net realized gains (losses), trading fixed maturities 20 5 32 18
Net realized gains (losses), equity investments 590 176 (968) 2,115
Net realized gains (losses), other investments — (245) (158) (826)
Change in unrealized holding gains (losses), trading fixed maturities 17 (5) (85) 165
Change in unrealized holding gains (losses), equity investments 1,370 4,979 4,797 1,762
Change in unrealized holding gains (losses), convertible securities, carried at fair value 90 267 214 873
Other(1)
— (41) — 6,719
Net investment gains (losses) $ 841 $ 2,252 $ (626) $ 5,146
(1) Includes a gain of $6.5 million related to the decrease in the contingent consideration liability during the 2024 nine-month period. See further discussion on the contingent consideration in Note 2 and Note 8 of the Notes to Consolidated Financial Statements in ProAssurance’s December 31, 2024 report on Form 10-K.
For the three and nine months ended September 30, 2025, ProAssurance recognized $1.3 million and $0.6 million of credit-related impairment losses in earnings, respectively, and $0.6 million and $0.5 million of non-credit impairment losses in OCI, respectively, primarily related to corporate bonds in the consumer, communication and real estate sectors. For the three and nine months ended September 30, 2024, ProAssurance recognized $1.8 million and $3.2 million of credit-related impairment losses in earnings, respectively, primarily related to four corporate bonds in the real estate sector. ProAssurance recognized a nominal amount of non-credit impairment losses in OCI for the nine months ended September 30, 2024.
The following table presents a roll forward of cumulative credit losses recorded in earnings related to impaired debt securities for which a portion of the impairment was recorded in OCI.
Three Months Ended
September 30 Nine Months Ended
September 30
(In thousands) 2025 2024 2025 2024
Balance beginning of period $ 57 $ 1,267 $ 1,267 $ 57
Additional credit losses recognized during the period, related to securities for which:
No impairment has been previously recognized 1,263 — 1,263 740
Impairment has been previously recognized — — — 470
Reductions due to:
Securities sold during the period (1) — (1,211) —
Balance September 30
$ 1,319 $ 1,267 $ 1,319 $ 1,267
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Notes to Condensed Consolidated Financial Statements (Unaudited)
September 30, 2025
4. Income Taxes
For interim periods, ProAssurance generally utilizes the estimated annual effective tax rate method under which the Company determines its provision (benefit) for income taxes based on the current estimate of its annual effective tax rate. For the three and nine months ended September 30, 2025 and 2024, the Company utilized the estimated annual effective tax rate method. Under this method, items which are unusual, infrequent, or that cannot be reliably estimated are considered in the effective tax rate in the period in which the item is included in income and are referred to as discrete items.
For the three and nine months ended September 30, 2025, the provision for income taxes is different from that which would be obtained by applying the statutory federal income tax rate to income (loss) before income taxes primarily due to non-deductible transaction-related costs associated with the proposed merger transaction with The Doctors Company, non-U.S. operating results and, for the nine months ended September 30, 2025, the amount of executive compensation that is in excess of the statutory limitation. For the three and nine months ended September 30, 2024, the provision for income taxes is different from that which would be obtained by applying the statutory federal income tax rate to income (loss) before income taxes primarily due to the effect of tax-favored income, the estimated tax rate differential between the Company's actual effective tax rate and its projected annual effective tax rate as calculated under the estimated annual effective tax rate method and, for the nine months ended September 30, 2024, the decrease in the contingent consideration liability related to the NORCAL acquisition, all of which was non-taxable. See further discussion on the contingent consideration in Note 2 and Note 8 of the Notes to Consolidated Financial Statements in ProAssurance's December 31, 2024 report on Form 10-K.
ProAssurance had a receivable for U.S. federal and U.K. income taxes carried as a part of other assets of $2.1 million as of September 30, 2025 and a liability for U.S. federal and U.K. income taxes carried as a part of other liabilities of $1.0 million as of December 31, 2024.
5. Reserve for Losses and Loss Adjustment Expenses
The reserve for losses is established based on estimates of individual claims and actuarially determined estimates of future losses based on ProAssurance’s past loss experience, available industry data and projections as to future claims frequency, severity, inflationary trends and settlement patterns. Estimating the reserve, particularly the reserve appropriate for liability exposures, is a complex process. For a high proportion of the risks insured or reinsured by ProAssurance, claims may be resolved over an extended period of time, often five years or more, and may be subject to litigation. Estimating losses requires ProAssurance to make and revise judgments and assessments regarding multiple uncertainties over an extended period of time. As a result, the reserve estimate may vary considerably from the eventual outcome. The assumptions used in establishing ProAssurance’s reserve are regularly reviewed and updated by management as new data becomes available. Changes to estimates of previously established reserves are included in earnings in the period in which the estimate is changed. For additional information regarding ProAssurance's reserve for losses, see Note 1 and Note 7 of the Notes to Consolidated Financial Statements included in ProAssurance's December 31, 2024 report on Form 10-K.
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Notes to Condensed Consolidated Financial Statements (Unaudited)
September 30, 2025
Activity in the reserve for losses and loss adjustment expenses is summarized as follows:
(In thousands) Nine Months Ended September 30, 2025 Nine Months Ended September 30, 2024 Year Ended December 31, 2024
Balance, beginning of year $ 3,257,696 $ 3,401,281 $ 3,401,281
Less reinsurance recoverables on unpaid losses and loss adjustment expenses 409,069 445,573 445,573
Net balance, beginning of year 2,848,627 2,955,708 2,955,708
Net losses:
Current year
566,072 585,734 779,650
(Favorable) unfavorable development of reserves established in prior years, net (1)
(29,975) (28,709) (40,215)
Total 536,097 557,025 739,435
Paid related to:
Current year (61,076) (71,191) (106,443)
Prior years (583,766) (564,602) (733,248)
Total paid (644,842) (635,793) (839,691)
Foreign currency exchange rate (gains) losses (2)
15,392 1,441 (6,825)
Net balance, end of period 2,755,274 2,878,381 2,848,627
Plus reinsurance recoverables on unpaid losses and loss adjustment expenses 363,663 461,302 409,069
Balance, end of period $ 3,118,937 $ 3,339,683 $ 3,257,696
(1) Net prior year reserve development recognized for the nine months ended September 30, 2025 and 2024 as well as the year ended December 31, 2024 included $2.7 million, $4.3 million and $5.3 million, respectively, of amortization of the purchase accounting fair value adjustment on NORCAL's assumed net reserve and amortization of the negative VOBA associated with NORCAL's DDR reserve which is recorded as a reduction to prior accident year net losses and loss adjustment expenses.
(2) Foreign currency exchange rate (gains) losses are related to foreign currency denominated loss reserves associated with international insurance exposures in the Specialty P&C segment, primarily related to a strategic partnership with an international medical professional liability insured. Foreign currency exchange rate (gains) losses on foreign currency denominated loss reserves are reflected through net income (loss) as a component of other income (expense) in the Condensed Consolidated Statements of Income and Comprehensive Income and reported in the Corporate segment.
Estimating liability reserves is complex and requires the use of many assumptions. As time passes and ultimate losses for prior years are either known or become subject to a more precise estimation, ProAssurance increases or decreases the reserve estimates established in prior periods.
The consolidated net favorable prior year reserve development recognized for the nine months ended September 30, 2025 primarily reflected:
•Net favorable development of $23.8 million recognized in the Specialty P&C segment driven by $24.0 million of net favorable development in the segment's MPL line of business, principally related to accident years 2018 through 2022, $2.0 million related to the Medical Technology Liability line of business, principally related to accident years 2022 and 2023, and $2.7 million related to purchase accounting amortization (see previous discussion in footnote 1 in the table above). The net favorable development in the Specialty P&C segment was partially offset by $4.9 million of unfavorable development attributable to the Company's Lloyd’s Syndicates operations (participation discontinued), primarily aviation related losses.
•Consolidated net favorable development recognized during the nine months ended September 30, 2025 also included net favorable development of $1.0 million in the Workers' Compensation Insurance segment reflecting a large claim reserve reduction from the 2021 accident year, which had previously exceeded the per person maximum limit under the reinsurance contract.
•Consolidated net favorable loss development recognized during the nine months ended September 30, 2025 also included net favorable development of $5.2 million in the Segregated Portfolio Cell Reinsurance segment related to workers' compensation business of $5.3 million, reflecting favorable trends in claim closing patterns primarily in
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Notes to Condensed Consolidated Financial Statements (Unaudited)
September 30, 2025
accident years 2021 through 2024. Partially offsetting the favorable development is a nominal amount of unfavorable development related to medical professional liability business related to one program in which the Company does not participate in the underwriting results.
For additional information regarding ProAssurance's prior year reserve development recognized for the nine months ended September 30, 2024 and the year ended December 31, 2024, see Note 6 of the Notes to Condensed Consolidated Financial Statements included in ProAssurance's September 30, 2024 report on Form 10-Q and Note 7 of the Notes to Consolidated Financial Statements included in ProAssurance's December 31, 2024 report on Form 10-K.
6. Commitments and Contingencies
ProAssurance is involved in various legal actions related to insurance policies and claims handling including, but not limited to, claims asserted by policyholders. These types of legal actions arise in the Company's ordinary course of business and, in accordance with GAAP for insurance entities, are considered as a part of the Company's loss reserving process, which is described in detail under the heading "Losses and Loss Adjustment Expenses" in the Accounting Policies section in Note 1 of the Notes to Consolidated Financial Statements in ProAssurance's December 31, 2024 report on Form 10-K. ProAssurance also has other direct actions against the Company unrelated to its claims activity which are evaluated and accounted for as a part of other liabilities. For these corporate legal actions, the Company evaluates each case separately and establishes what it believes is an appropriate reserve based on GAAP guidance related to contingent liabilities. As of September 30, 2025, there were no material reserves established for corporate legal actions.
As of September 30, 2025, ProAssurance has funding commitments primarily related to non-public investment entities totaling approximately $207.7 million.
7. Debt
ProAssurance’s outstanding debt consisted of the following:
($ in thousands) September 30,
2025 December 31,
2024
Contribution Certificates due 2031, interest at 3.0% (effective interest rate at 3.88%) paid annually in April
$ 182,158 $ 181,163
Revolving Credit Agreement, outstanding borrowings are not permitted to exceed $300 million aggregately, including a $50 million accordion feature; Revolving Credit Agreement expires in 2028. The effective interest rate was 5.98% as of September 30, 2025
125,000 125,000
Term Loan, principal repayments in quarterly installments began June 30, 2024; Term Loan expires in 2028. The effective interest rate was 6.10% as of September 30, 2025
115,625 120,313
Total principal 422,783 426,476
Less unamortized debt issuance costs 1,260 1,603
Debt less unamortized debt issuance costs $ 421,523 $ 424,873
Covenant Compliance
There are no financial covenants associated with the Contribution Certificates due 2031.
The Revolving Credit Agreement contains customary representations, covenants and events constituting default, and remedies for default. As of September 30, 2025, ProAssurance is in compliance with all covenants of the Revolving Credit Agreement.
Additional Information
For additional information regarding ProAssurance's debt, see Note 10 of the Notes to Consolidated Financial Statements included in ProAssurance's December 31, 2024 report on Form 10-K.
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Notes to Condensed Consolidated Financial Statements (Unaudited)
September 30, 2025
8. Derivatives
ProAssurance is exposed to certain risks relating to its ongoing business and investment activities. ProAssurance utilizes derivative instruments as part of its risk management strategy to reduce the market risk related to fluctuations in future interest rates associated with a portion of its variable-rate debt. ProAssurance also uses derivative instruments to mitigate foreign exchange exposure related to fluctuations in exchange rates associated with foreign currency denominated loss reserves. See Note 1 of the Notes to Consolidated Financial Statements included in ProAssurance's December 31, 2024 report on Form 10-K for the Company's accounting policy regarding derivative instruments.
To manage the Company's exposure to variability in cash flows of forecasted interest payments attributable to variability in the selected base rates on borrowings under both the Revolving Credit Agreement and Term Loan, ProAssurance entered into two forward-starting interest rate swap agreements ("Interest Rate Swaps"), each with an effective date of December 29, 2023 and a maturity date of March 31, 2028. As ProAssurance's Interest Rate Swaps are designated and qualify as highly effective cash flow hedges, changes in the fair value of the Interest Rate Swaps are recorded in AOCI, net of tax, and are reclassified into earnings when the hedged cash flows impact earnings. The Interest Rate Swap hedging the variability in cash flows associated with interest payments on the Revolving Credit Agreement will have a constant $125 million notional amount throughout the term of the swap, while the Interest Rate Swap hedging the variability in cash flows associated with interest payments on the Term Loan will have an amortizing $125 million notional amount, which is designed to match the outstanding principal on the Term Loan throughout the term of the swap. Borrowings under the Revolving Credit Agreement and Term Loan will accrue interest at a selected base rate, adjusted by a margin. The Interest Rate Swaps effectively fix the base rate on borrowings under the Revolving Credit Agreement and Term Loan to 3.187% and 3.207%, respectively. The margin component of the interest rate, which can vary from 0% to 2.375%, will remain variable and is based on ProAssurance’s debt to capitalization ratio. As of September 30, 2025, the margin component of the interest rate on the outstanding borrowings under the Revolving Credit Agreement and Term Loan was 1.98% and 2.10%, respectively, based on ProAssurance's debt to capitalization ratio as of June 30, 2025 resulting in a total interest rate of 5.17% and 5.31%, respectively, including the effect of the Interest Rate Swaps on the base rate. Additional information regarding the Company's Revolving Credit Agreement and Term Loan is provided in Note 10 of the Notes to Consolidated Financial Statements included in ProAssurance's December 31, 2024 report on Form 10-K.
ProAssurance received cash collateral from the counterparty to secure the net present value of future cash flows associated with the Interest Rate Swaps which is reflected as a component of other liabilities on the Condensed Consolidated Balance Sheet. Those cash collateral balances were $1.7 million and $6.7 million at September 30, 2025 and December 31, 2024, respectively.
ProAssurance utilizes foreign currency forward contracts with the objective of offsetting fluctuations in exchange rates related to foreign currency denominated balances associated with the Company's strategic partnership with an international medical professional liability insurer. ProAssurance enters into short-term forward contracts with a maturity at inception of less than three months to mitigate these foreign exchange exposures. ProAssurance has designated these foreign currency forwards as an economic hedge (non-hedging instrument) of foreign currency exchange rate risk and any change in fair value of these derivatives is recognized in earnings during the period of change.
The following table provides a summary of the volume and fair value position of the Company's derivative instruments as well as the reporting location in the Condensed Consolidated Balance Sheet as of September 30, 2025 and December 31, 2024.
($ in thousands) September 30, 2025 December 31, 2024
Derivative Instruments
Location in the Condensed Consolidated Balance Sheets Number of Instruments
Aggregate Notional Amount(1)
Estimated Fair Value(2)
Number of Instruments
Aggregate Notional Amount(1)
Estimated Fair Value(2)
Cash Flow Hedge- Interest Rate Swaps Other Assets 2 $240,625 $734 2 $245,313 $5,801
Foreign Currency Forwards
Other Assets (Liabilities)
2 $124,747 $(1,540) 1 $5,470 $293
(1) Volume is represented by the derivative instruments' notional amount.
(2) Additional information regarding the fair value of the Company's Interest Rate Swaps and foreign currency forwards is provided in Note 2.
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Notes to Condensed Consolidated Financial Statements (Unaudited)
September 30, 2025
For the three and nine months ended September 30, 2025 and 2024, ProAssurance reclassified a gain on the Interest Rate Swaps from AOCI, net of tax, into earnings as shown in the table below:
Qualifying Cash Flow Hedges - Gains (Losses) Reclassified from AOCI, net of tax, to Earnings
(In thousands) Three Months Ended September 30 Nine Months Ended September 30
Derivatives Designated as Hedging Instruments
Location in the Condensed Consolidated Statements of Income and Comprehensive Income
2025 2024 2025 2024
Cash Flow Hedge- Interest Rate Swaps Interest Expense $535 $1,068 $1,620 $3,192

At September 30, 2025, management estimates that it will reclassify approximately $1.0 million of pre-tax net gains on the Interest Rate Swaps from AOCI to earnings over the next twelve months, which will be recorded to interest expense. See additional information on gains or losses related to the Interest Rate Swaps reported as a component of AOCI in Note 9.
The following table presents the pre-tax impact of the change in the fair value of the foreign currency forwards and the reporting location in the Condensed Consolidated Statements of Income and Comprehensive Income for the three and nine months ended September 30, 2025.
(In thousands) Three Months Ended September 30 Nine Months Ended September 30
Derivatives not Designated as Hedging Instruments
Location in the Consolidated Statements of Income and Comprehensive Income
2025 2024 2025 2024
Foreign Currency Forwards
Other Income (Expense)
$ (1,347) $ — $ 5,977 $ —
As a result of the utilization of derivative instruments, ProAssurance is exposed to risk that the counterparties will fail to meet their contractual obligations. To mitigate this counterparty credit risk, ProAssurance only enters into derivative contracts with carefully selected major financial institutions based upon their credit ratings and monitors their creditworthiness. As of September 30, 2025, the counterparty involved with the Interest Rate Swaps had an investment grade rating of A and the counterparty involved with the foreign currency forwards had an investment grade rating of BBB. Each counterparty has performed in accordance with their contractual obligations.
9. Shareholders’ Equity
At September 30, 2025 and December 31, 2024, ProAssurance had 100 million shares of authorized common stock and 50 million shares of authorized preferred stock. The Board has the authority to determine provisions for the issuance of preferred shares, including the number of shares to be issued, the designations, powers, preferences and rights, and the qualifications, limitations or restrictions of such shares.
At September 30, 2025, Board authorizations for the repurchase of common shares or the retirement of outstanding debt of $55.9 million remained available for use. ProAssurance did not repurchase any common shares during the three and nine months ended September 30, 2025 or 2024.
Other Comprehensive Income (Loss) and Accumulated Other Comprehensive Income (Loss)
The following tables provide a detailed breakout of the components of AOCI and the amounts reclassified from AOCI to net income (loss). The tax effects of all amounts in the tables below, except for an immaterial amount of unrealized gains and losses on available-for-sale securities held at the Company's U.K. subsidiary, were computed using the enacted U.S. federal corporate tax rate of 21%. OCI included a deferred tax expense of $7.0 million and $22.1 million for the three and nine months ended September 30, 2025, respectively, as compared to $22.1 million and $21.9 million for the same respective periods of 2024.
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Notes to Condensed Consolidated Financial Statements (Unaudited)
September 30, 2025
The changes in the balance of each component of AOCI for the three and nine months ended September 30, 2025 and 2024 were as follows:
(In thousands)
Unrealized Investment Gains (Losses)
Cash Flow Hedging Gains (Losses) (1)
Non-credit Impairments Unrecognized Change in Defined Benefit Plan Liabilities Accumulated Other Comprehensive Income (Loss)
Balance, July 1, 2025 $ (116,675) $ 952 $ (11) $ (822) $ (116,556)
OCI, before reclassifications, net of tax 25,604 158 (478) — 25,284
Amounts reclassified from AOCI, net of tax 966 (535) — — 431
Net OCI, current period 26,570 (377) (478) — 25,715
Balance, September 30, 2025 $ (90,105) $ 575 $ (489) $ (822) $ (90,841)
(In thousands)
Unrealized Investment Gains (Losses)
Cash Flow Hedging Gains (Losses) (1)
Non-credit Impairments Unrecognized Change in Defined Benefit Plan Liabilities Accumulated Other Comprehensive Income (Loss)
Balance, December 31, 2024 $ (176,053) $ 4,576 $ (92) $ (822) $ (172,391)
OCI, before reclassifications, net of tax 81,855 (2,381) (478) — 78,996
Amounts reclassified from AOCI, net of tax 4,093 (1,620) 81 — 2,554
Net OCI, current period 85,948 (4,001) (397) — 81,550
Balance, September 30, 2025 $ (90,105) $ 575 $ (489) $ (822) $ (90,841)
(In thousands) Unrealized Investment Gains (Losses)
Cash Flow Hedging Gains (Losses) (1)
Non-credit Impairments
Unrecognized Change in Defined Benefit Plan Liabilities
Accumulated Other Comprehensive Income (Loss)
Balance, July 1, 2024 $ (211,070) $ 6,302 $ (92) $ (1,177) $ (206,037)
OCI, before reclassifications, net of tax 84,305 (4,619) — — 79,686
Amounts reclassified from AOCI, net of tax 2,311 (1,068) — — 1,243
Net OCI, current period 86,616 (5,687) — — 80,929
Balance, September 30, 2024 $ (124,454) $ 615 $ (92) $ (1,177) $ (125,108)
(In thousands) Unrealized Investment Gains (Losses)
Cash Flow Hedging Gains (Losses) (1)
Non-credit Impairments Unrecognized Change in Defined Benefit Plan Liabilities Accumulated Other Comprehensive Income (Loss)
Balance, December 31, 2023 $ (206,327) $ 3,026 $ (11) $ (1,177) $ (204,489)
OCI, before reclassifications, net of tax 77,369 781 (455) — 77,695
Amounts reclassified from AOCI, net of tax 4,504 (3,192) 374 — 1,686
Net OCI, current period 81,873 (2,411) (81) — 79,381
Balance, September 30, 2024 $ (124,454) $ 615 $ (92) $ (1,177) $ (125,108)
(1) ProAssurance's Interest Rate Swaps are designated and qualify as highly effective cash flow hedges. See Note 8 for additional information on the Interest Rate Swaps.
10. Variable Interest Entities
ProAssurance holds passive interests in a number of entities that are considered to be VIEs under GAAP guidance. ProAssurance's VIE interests principally consist of interests in LPs/LLCs formed for the purpose of achieving diversified equity and debt returns. ProAssurance's VIE interests, carried as a part of investment in unconsolidated subsidiaries, totaled $230.7 million at September 30, 2025 and $234.4 million at December 31, 2024. ProAssurance does not have power over the activities that most significantly impact the economic performance of these VIEs and thus is not the primary beneficiary. Investments in
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Notes to Condensed Consolidated Financial Statements (Unaudited)
September 30, 2025
entities where ProAssurance holds a greater than minor interest but does not hold a controlling interest are accounted for using the equity method. Therefore, ProAssurance has not consolidated these VIEs. ProAssurance’s involvement with each of these VIEs is limited to its direct ownership interest in the VIE. Except for the funding commitments disclosed in Note 6, ProAssurance has no arrangements with any of these VIEs to provide other financial support to or on behalf of the VIE. At September 30, 2025, ProAssurance’s maximum loss exposure relative to these investments was limited to the carrying value of ProAssurance’s investment in the VIE.
ProAssurance is the primary beneficiary of PPM RRG. While there is no direct ownership of PPM RRG by ProAssurance, it manages the business operations of PPM RRG through its management services agreement and has effective control of the PPM RRG's Board of Directors through an irrevocable voting proxy. The management services agreement allows ProAssurance to provide management and oversight services to PPM RRG, which includes the ability to make business decisions impacting the operations of PPM RRG. PPM RRG has a $5 million surplus note to NORCAL which is its only source of capital. At September 30, 2025 and December 31, 2024, approximately $145 million and $139 million of ProAssurance's assets, respectively, and approximately $145 million and $139 million of its liabilities, respectively, included on the Condensed Consolidated Balance Sheet were related to PPM RRG.
11. Earnings (Loss) Per Share
Diluted weighted average shares is calculated as basic weighted average shares plus the effect, calculated using the treasury stock method, of assuming that restricted share units and performance share units have vested. The following table provides a reconciliation between the Company's basic weighted average number of common shares outstanding to its diluted weighted average number of common shares outstanding:
(In thousands, except per share data)
Three Months Ended
September 30 Nine Months Ended
September 30
2025 2024 2025 2024
Weighted average number of common shares outstanding, basic 51,414 51,156 51,317 51,077
Dilutive effect of securities:
Restricted Share Units 208 78 202 106
Performance Share Units 133 43 108 34
Weighted average number of common shares outstanding, diluted 51,755 51,277 51,627 51,217
Effect of dilutive shares on earnings (loss) per share $ — $ — $ — $ (0.01)
There were no antidilutive common share equivalents for the three and nine months ended September 30, 2025. The diluted weighted average number of common shares outstanding for the three and nine months ended September 30, 2024 excluded approximately 236,000 and 210,000, respectively, of common share equivalents issuable under the Company's stock compensation plans, as their effect would have been antidilutive.
Dilutive common share equivalents are reflected in the earnings (loss) per share calculation while antidilutive common share equivalents are not reflected in the earnings (loss) per share calculation.
12. Segment Information
ProAssurance's segments are based on the Company's internal management reporting structure for which financial results are regularly evaluated by the Company's CODM to determine resource allocation and assess operating performance. The Company continually assesses its internal management reporting structure and information evaluated by its CODM to determine whether any changes have occurred that would impact its segment reporting structure.
Segment Reorganization
During the first quarter of 2025, ProAssurance altered its internal management reporting structure and the financial results evaluated by its CODM; therefore, ProAssurance changed the composition of its operating and reportable segments to align with how the CODM currently oversees the business, allocates resources and evaluates operating performance. As a result, ProAssurance now reports the financial results of its subsidiary IAO, Inc. d/b/a ProAssurance Agency in the Specialty P&C segment which were previously reported in the Corporate segment. All prior period segment information has been recast to conform to the current period presentation. The change in presentation had no impact on previously reported consolidated financial results.
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Notes to Condensed Consolidated Financial Statements (Unaudited)
September 30, 2025
The Company operates in four segments: Specialty P&C, Workers' Compensation Insurance, Segregated Portfolio Cell Reinsurance and Corporate. Additional information regarding ProAssurance's segments is included in Note 16 of the Notes to Consolidated Financial Statements in ProAssurance’s December 31, 2024 report on Form 10-K. A description of each of ProAssurance's four operating and reportable segments follows.
•Specialty P&C includes medical professional liability insurance and medical technology liability insurance. The Specialty P&C segment also includes non-premium revenues generated outside of the Company's insurance entities and the underwriting results from ProAssurance's previous participation in Lloyd's of London Syndicate 1729 and Syndicate 6131, which is currently in runoff.
•Workers' Compensation Insurance includes workers' compensation insurance products which are provided primarily to employers with 1,000 or fewer employees.
•Segregated Portfolio Cell Reinsurance includes the results (underwriting profit or loss, plus investment results, net of U.S. federal income taxes) of SPCs at Inova Re and Eastern Re, the Company's Cayman Islands SPC operations.
•Corporate includes ProAssurance's investment operations excluding those reported in the Company's Segregated Portfolio Cell Reinsurance segment. In addition, this segment includes corporate expenses, interest expense, U.S. and U.K. income taxes and foreign currency exchange rate gains and losses.
The accounting policies of the segments are described in Note 1 of the Notes to Consolidated Financial Statements in ProAssurance’s December 31, 2024 report on Form 10-K. The CODM evaluates the performance of the Specialty P&C and Workers' Compensation Insurance segments based on before tax underwriting profit or loss. The CODM also evaluates the Specialty P&C and Workers' Compensation Insurance segment's net loss and underwriting expense ratios in assessing each segment's financial performance. The net loss ratio is calculated as the segment's net losses and loss adjustment expenses incurred divided by net premiums earned. The underwriting expense ratio is calculated as the segment's underwriting, policy acquisition and operating expenses incurred divided by net premiums earned. The CODM evaluates the performance of the Segregated Portfolio Cell Reinsurance segment based on operating profit or loss, which includes investment results of investment assets solely allocated to SPC operations, net of U.S. federal income taxes. Performance of the Corporate segment is evaluated by the CODM based on its contribution to consolidated after-tax results. The CODM also evaluates the contribution of the Corporate segment to the consolidated underwriting expense ratio (Corporate operating expenses divided by consolidated net premiums earned) in assessing the segment's financial performance. ProAssurance accounts for inter-segment transactions as if the transactions were to third parties at current market prices. Assets are not allocated to segments because investments, other than the investments discussed above that are solely allocated to the Segregated Portfolio Cell Reinsurance segment, and other assets are not managed at the segment level.
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. The CODM does not consider goodwill or intangible asset impairments, changes in the fair value of contingent consideration or transaction-related costs for proposed or 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.
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ProAssurance Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
September 30, 2025
Financial results by segment were as follows:
Three Months Ended September 30, 2025
(In thousands) Specialty P&C Workers' Compensation Insurance Segregated Portfolio Cell Reinsurance Corporate Inter-segment Eliminations Consolidated
Net premiums earned $ 180,787 $ 40,972 $ 11,645 $ — $ — $ 233,404
Net investment income — — 1,100 39,342 — 40,442
Equity in earnings (loss) of unconsolidated subsidiaries — — — 4,731 — 4,731
Net investment gains (losses) — — 796 45 — 841
Other income (expense)(1)
996 414 1 (1,003) (272) 136
Net losses and loss adjustment expenses(2)
(149,343) (30,727) (6,129) — — (186,199)
Operating expenses(1)(2)(3)
(24,082) (11,481) (430) (7,835) (6) (43,834)
Deferred policy acquisition costs(2)
(26,839) (4,313) (3,727) — 278 (34,601)
SPC U.S. federal income tax benefit (expense)(4)
— — (658) — — (658)
SPC dividend (expense) income — — (1,674) — — (1,674)
Interest expense — — — (5,236) — (5,236)
Income tax benefit (expense) — — — (2,928) — (2,928)
Segment results $ (18,481) $ (5,135) $ 924 $ 27,116 $ — 4,424
Reconciliation of segments to consolidated results:
Transaction-related costs, net(5)
(2,978)
Net income (loss) $ 1,446
Significant non-cash items:
Depreciation and amortization, net of accretion $ 2,001 $ 1,261 $ (630) $ 676 $ — $ 3,308
Nine Months Ended September 30, 2025
(In thousands) Specialty P&C Workers' Compensation Insurance Segregated Portfolio Cell Reinsurance Corporate Inter-segment Eliminations Consolidated
Net premiums earned
$ 543,351 $ 124,038 $ 34,697 $ — $ — $ 702,086
Net investment income
— — 2,818 113,508 — 116,326
Equity in earnings (loss) of unconsolidated subsidiaries
— — — 13,330 — 13,330
Net investment gains (losses) — — 1,779 (2,405) — (626)
Other income (expense)(1)
6,904 1,237 18 (10,040) (850) (2,731)
Net losses and loss adjustment expenses(2)
(425,338) (92,027) (18,732) — — (536,097)
Operating expenses(1)(2)(3)
(72,811) (33,312) (1,323) (24,806) 58 (132,194)
Deferred policy acquisition costs amortization(2)
(73,753) (14,872) (10,916) — 792 (98,749)
SPC U.S. federal income tax benefit (expense)(4)
— — (1,913) — — (1,913)
SPC dividend (expense) income
— — (3,762) — — (3,762)
Interest expense
— — — (15,620) — (15,620)
Income tax benefit (expense)
— — — (9,001) — (9,001)
Segment results
$ (21,647) $ (14,936) $ 2,666 $ 64,966 $ — 31,049
Reconciliation of segments to consolidated results:
Transaction-related costs, net(5)
(13,504)
Net income (loss) $ 17,545
Significant non-cash items:
Depreciation and amortization, net of accretion $ 6,231 $ 3,794 $ (1,534) $ 2,180 $ — $ 10,671
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ProAssurance Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
September 30, 2025
Three Months Ended September 30, 2024
(In thousands) Specialty P&C Workers' Compensation Insurance Segregated Portfolio Cell Reinsurance Corporate Inter-segment Eliminations Consolidated
Net premiums earned $ 188,704 $ 41,829 $ 12,627 $ — $ — $ 243,160
Net investment income — — 1,009 36,263 — 37,272
Equity in earnings (loss) of unconsolidated subsidiaries — — — 4,767 — 4,767
Net investment gains (losses) — — 599 1,653 — 2,252
Other income (expense)(1)
1,395 537 1 (3,850) (281) (2,198)
Net losses and loss adjustment expenses(2)
(136,337) (32,193) (7,801) — — (176,331)
Operating expenses(1)(2)(3)
(26,616) (10,915) (222) (10,290) 7 (48,036)
Deferred policy acquisition costs(2)
(25,238) (3,468) (3,921) — 274 (32,353)
SPC U.S. federal income tax benefit (expense)(4)
— — (377) — — (377)
SPC dividend (expense) income — — (1,360) — — (1,360)
Interest expense — — — (5,698) — (5,698)
Income tax benefit (expense) — — — (4,657) — (4,657)
Segment results $ 1,908 $ (4,210) $ 555 $ 18,188 $ — 16,441
Net income (loss) $ 16,441
Significant non-cash items:
Depreciation and amortization, net of accretion $ 2,065 $ 1,270 $ (671) $ 1,216 $ — $ 3,880
Nine Months Ended September 30, 2024
(In thousands) Specialty P&C Workers' Compensation Insurance Segregated Portfolio Cell Reinsurance Corporate Inter-segment Eliminations Consolidated
Net premiums earned $ 562,137 $ 124,692 $ 40,347 $ — $ — $ 727,176
Net investment income — — 2,687 105,040 — 107,727
Equity in earnings (loss) of unconsolidated subsidiaries — — — 16,383 — 16,383
Net investment gains (losses) — — 2,327 (3,921) — (1,594)
Other income (expense)(1)
4,984 1,483 1 (1,340) (1,256) 3,872
Net losses and loss adjustment expenses(2)
(434,564) (95,980) (26,481) — — (557,025)
Operating expenses(1)(2)(3)
(77,308) (32,586) (1,588) (27,084) 342 (138,224)
Deferred policy acquisition costs amortization(2)
(76,839) (11,422) (12,517) — 914 (99,864)
SPC U.S. federal income tax benefit (expense)(4)
— — (1,043) — — (1,043)
SPC dividend (expense) income
— — (2,479) — — (2,479)
Interest expense
— — — (17,004) — (17,004)
Income tax benefit (expense)
— — — (7,837) — (7,837)
Segment results
$ (21,590) $ (13,813) $ 1,254 $ 64,237 $ — 30,088
Reconciliation of segments to consolidated results:
Transaction-related costs, net(5)
(253)
Contingent Consideration(6)
6,740
Net income (loss) $ 36,575
Significant non-cash items:
Depreciation and amortization, net of accretion $ 6,784 $ 3,747 $ (1,661) $ 4,775 $ — $ 13,645
(1) Includes certain fees for services provided by the Workers' Compensation Insurance segment to the SPCs at Inova Re and Eastern Re which 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) The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM.
(3) Primarily includes compensation-related costs, professional fees, software and equipment costs and management fees in the Specialty P&C, Workers' Compensation Insurance and Corporate segments. Operating expenses in the Segregated Portfolio Cell Reinsurance segment primarily include bank fees, professional fees, changes in the allowance for expected credit losses and policyholder dividend expense. The remaining operating expenses were comprised of individually insignificant components.
(4) 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.
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ProAssurance Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
September 30, 2025
(5) Represents the transaction-related costs, after-tax, associated with the proposed merger transaction between ProAssurance and The Doctors Company for the three and nine months ended September 30, 2025 and actuarial consulting fees paid during the second quarter of 2024 in connection with the final determination of contingent consideration associated with the acquisition of NORCAL. For the three and nine months ended September 30, 2025, pre-tax transaction-related costs of approximately $3.0 million and $14.6 million, respectively, were included as a component of consolidated operating expenses as compared to $0.3 million for the 2024 nine-month period. The associated income tax benefit was nominal for the three months ended September 30, 2025 and approximately $1.1 million for the nine months ended September 30, 2025 and was included as a component of consolidated income tax benefit (expense) on the Condensed Consolidated Statements of Income and Comprehensive Income as compared to a nominal amount for the 2024 nine-month period.
(6) Represents the change in the fair value of contingent consideration issued in connection with the NORCAL acquisition and the reversal of a nominal amount of associated contingent investment banker fees accrued during purchase accounting, all of which were included as a component of consolidated net investment gains (losses) on the Condensed Consolidated Statements of Income and Comprehensive Income for the nine months ended September 30, 2024. See further discussion on the contingent consideration in Note 2 of the Notes to Consolidated Financial Statements in ProAssurance's December 31, 2024 report on Form 10-K.
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 September 30 Nine Months Ended September 30
(In thousands) 2025 2024 2025 2024
Specialty P&C Segment
Gross premiums earned:
MPL
$ 183,523 $ 186,376 $ 548,176 $ 551,791
Medical Technology Liability
10,689 11,262 32,360 33,196
Lloyd's Syndicates
508 2,897 1,918 12,256
Other 3,674 5,373 12,038 16,986
Ceded premiums earned (17,607) (17,204) (51,141) (52,092)
Segment net premiums earned 180,787 188,704 543,351 562,137
Workers' Compensation Insurance Segment
Gross premiums earned:
Traditional business 44,783 46,148 133,890 136,310
Alternative market business
14,478 15,674 43,213 49,130
Ceded premiums earned (18,289) (19,993) (53,065) (60,748)
Segment net premiums earned 40,972 41,829 124,038 124,692
Segregated Portfolio Cell Reinsurance Segment
Gross premiums earned:
Workers' compensation(1)
12,840 14,095 38,333 44,767
MPL(2)
676 518 2,009 1,881
Ceded premiums earned (1,871) (1,986) (5,645) (6,301)
Segment net premiums earned 11,645 12,627 34,697 40,347
Consolidated net premiums earned $ 233,404 $ 243,160 $ 702,086 $ 727,176
(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.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The following discussion should be read in conjunction with the Condensed Consolidated Financial Statements and Notes to those statements which accompany this report. Throughout the discussion we use certain terms and abbreviations, which can be found in the Glossary of Terms and Acronyms at the beginning of this report. In addition, a glossary of insurance terms and phrases is available on the investor section of our website. Throughout the discussion, references to "ProAssurance," "ProAssurance Group," "PRA," "Company," "we," "us" and "our" refer to ProAssurance Corporation and its consolidated subsidiaries. The discussion contains certain forward-looking information that involves significant risks, assumptions and uncertainties. As discussed under the heading "Caution Regarding Forward-Looking Statements," our actual financial condition and results of operations could differ significantly from these forward-looking statements.
ProAssurance Overview
ProAssurance Corporation is a holding company for property and casualty insurance companies. Our insurance subsidiaries provide medical professional liability insurance, liability insurance for medical technology and life sciences risks and workers' compensation insurance.
During the first quarter of 2025, we altered our internal management reporting structure and the financial results evaluated by our CODM; therefore, we changed the composition of our operating and reportable segments to align with how the CODM currently oversees the business, allocates resources and evaluates operating performance. As a result, we now report the financial results of our subsidiary IAO, Inc. d/b/a ProAssurance Agency in the Specialty P&C segment which were previously reported in the Corporate segment. We operate in four segments: Specialty P&C, Workers' Compensation Insurance, Segregated Portfolio Cell Reinsurance and Corporate. All prior period segment information has been recast to conform to the current period presentation. The change in presentation had no impact on previously reported consolidated financial results.
Additional information on ProAssurance's four operating and reportable segments is included in Note 12 of the Notes to Condensed Consolidated Financial Statements, Note 16 of the Notes to Consolidated Financial Statements in our December 31, 2024 report on Form 10-K and in the Segment Results sections herein that follow.
Critical Accounting Estimates
Our Condensed Consolidated Financial Statements are prepared in conformity with GAAP. Preparation of these financial statements requires us to make estimates and assumptions that affect the amounts we report on those statements. We evaluate these estimates and assumptions on an ongoing basis based on current and historical developments, market conditions, industry trends and other information that we believe to be reasonable under the circumstances. We can make no assurance that actual results will conform to our estimates and assumptions; reported results of operations may be materially affected by changes in these estimates and assumptions. A detailed discussion of our critical accounting estimates is included in our Critical Accounting Estimates section in Item 7 of our December 31, 2024 report on Form 10-K.
Management considers the following accounting estimates to be critical because they involve significant judgment by management and those judgments could result in a material effect on our financial statements:
•Reserve for losses and loss adjustment expenses
•Reinsurance
•Valuation of investments and impairment of securities
•Income taxes
Estimation of Taxes
For interim periods, we generally utilize the estimated annual effective tax rate method under which we determine our provision (benefit) for income taxes based on the current estimate of our annual effective tax rate. For the three and nine months ended September 30, 2025 and September 30, 2024, we utilized the estimated annual effective tax rate method. Under this method, items which are unusual, infrequent or that cannot be reliably estimated are considered in the effective tax rate in the period in which the item is included in income and are referred to as discrete items. See further discussion on this method in Note 4 of the Notes to Condensed Consolidated Financial Statements.
U.S. Tax Legislation
The OBBBA was signed into law on July 4, 2025 and included extensions and modifications to various domestic and international tax provisions that were originally enacted under the TCJA. Under current accounting guidance, the effects of changes in tax law are accounted for in the period of enactment or the date the President signs the bill. These changes are considered a discrete component of the income tax provision and do not have a material impact on our effective tax rate or on our current or deferred taxes.
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Liquidity and Capital Resources and Financial Condition
Overview
ProAssurance Corporation is a holding company and is a legal entity separate and distinct from its subsidiaries. As a holding company, our principal source of external revenue is our investment revenues. In addition, dividends from our operating subsidiaries represent another source of funds for our obligations, including debt service. We also charge our core domestic operating subsidiaries within our Specialty P&C and Workers' Compensation Insurance segments a management fee based on the extent to which services are provided to the subsidiary and the amount of gross premium written by the subsidiary. At September 30, 2025, we held cash and liquid investments of approximately $125 million outside our insurance subsidiaries that were available for use without regulatory approval or other restriction. As of October 30, 2025, we also have an additional $125 million in permitted borrowings available under our Revolving Credit Agreement as well as the possibility of a $50 million accordion feature, if successfully subscribed, as discussed in this section under the heading "Debt."
To date during 2025, our operating subsidiaries have paid dividends to us of approximately $113 million, of which $61 million was paid in October 2025. Dividends paid in October 2025 have not been included in our cash and liquid investments held outside of insurance subsidiaries as of September 30, 2025. Excluding the dividends paid in October 2025, our insurance subsidiaries, in the aggregate, are permitted to pay dividends of approximately $105 million over the remainder of 2025 without prior approval of state insurance regulators. However, the payment of any dividend requires prior notice to the insurance regulator in the state of domicile, and the regulator may reduce or prevent the dividend if, in its judgment, payment of the dividend would have an adverse effect on the surplus of the insurance subsidiary. We make the decision to pay dividends from an insurance subsidiary based on the capital needs of that subsidiary and may pay less than the permitted dividend or may also request permission to pay an additional amount (an extraordinary dividend).
Cash Flows
Cash flows between periods compare as follows:
Nine Months Ended September 30
(In thousands) 2025 2024 Change
Net cash provided by (used in):
Operating activities $ (12,476) $ (10,477) $ (1,999)
Investing activities 20,865 (5,724) 26,589
Financing activities (8,813) (4,399) (4,414)
Increase (decrease) in cash and cash equivalents $ (424) $ (20,600) $ 20,176
The principal components of our operating cash flows are the excess of premiums collected and net investment income over losses paid and operating costs, including income taxes. Timing delays exist between the collection of premiums and the payment of losses associated with the premiums. Premiums are generally collected within the twelve-month period after the policy is written, while our claim payments are generally paid over a more extended period of time. Likewise, timing delays exist between the payment of claims and the collection of any associated reinsurance recoveries.
Operating cash flows decreased for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024. The change in operating cash flows was primarily due to:
•An increase in cash paid for operating expenses of $8.9 million driven by higher incentive based compensation and transaction-related costs associated with the proposed merger transaction with The Doctors Company (see Note 1 of the Notes to the Condensed Consolidated Financial Statements).
•A decrease in net premium receipts of $19.8 million primarily driven by a lower volume of written premium due to the proactive actions we have taken in certain lines of business to improve profitability, partially offset by a decrease in premiums paid for reinsurance.
The decrease in operating cash flows was partially offset by:
•A decrease in paid net losses of $20.4 million driven by our Specialty P&C segment which reflected a lower number of claims resolved with large indemnity payments as compared to the prior year period and an increase in cash received from reinsurance recoveries related to five large claims.
•An increase in cash received from investment income of $4.8 million driven by an increase in distributed earnings and redemptions from our portfolio of investments in LPs/LLCs and higher average book yields as we take advantage of the current interest rate environment as our portfolio matures.
The remaining variance in operating cash flows for the nine months ended September 30, 2025 as compared to the same period of 2024 was composed of individually insignificant components.
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We manage our investing cash flows to ensure that we will have sufficient liquidity to meet our obligations, taking into consideration the timing of cash flows from our investments, including interest payments, dividends and principal payments, as well as the expected cash flows to be generated by our operations as discussed in this section under the heading "Investing Activities and Related Cash Flows."
Our financing cash flows are primarily comprised of repayment of debt as well as capital contributions received from or return of capital to external SPC participants. See further discussion of debt in this section under the heading "Financing Activities and Related Cash Flows."
Operating Activities and Related Cash Flows
Reinsurance
Within our Specialty P&C segment, we use insurance and reinsurance (collectively, “reinsurance”) to provide capacity to write larger limits of liability, to provide reimbursement for losses incurred under the higher limit coverages we offer and to provide protection against losses in excess of policy limits. Within our Workers' Compensation Insurance segment, we use reinsurance to reduce our net liability on individual risks, to mitigate the effect of significant loss occurrences (including catastrophic events), to stabilize underwriting results and to increase underwriting capacity by decreasing leverage. In both our Specialty P&C and Workers' Compensation Insurance segments, we use reinsurance in risk sharing arrangements to align our objectives with those of our strategic business partners and to provide custom insurance solutions for large customer groups. The discussion in our Liquidity section under the same heading in Item 7 of our December 31, 2024 report on Form 10-K includes additional information regarding our reinsurance agreements.
Excess of Loss Reinsurance Agreements
Our Medical Professional Liability and Medical Technology Liability treaties renew annually on October 1 and our workers' compensation treaty renews annually on May 1. Our MPL and Medical Technology Liability treaties renewed October 1, 2025. For our MPL treaty, there was a decrease in reinstatement premiums provisions and a slight reduction to the gross rate paid under the renewed treaty. Retention of our Medical Technology Liability coverages in excess of $2 million increased to 6% from 0% of the next $8 million of risk. All other terms were consistent with the expiring treaties. Our traditional workers' compensation treaty renewed May 1, 2025 at a lower contract rate than the previous treaty. All other material terms were consistent with the expiring treaty. The significant coverages provided by our current excess of loss reinsurance agreements are depicted in the following table.
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Current Excess of Loss Reinsurance Agreements
Medical Professional Liability
Medical Technology & Life Sciences Products Workers' Compensation - Traditional
(1) Effective October 1, 2025, total reinsured limits decreased to $19M from $24M. Since we were not writing policies with these higher limits of coverage, the reduction in limit is not significant. One prepaid limit reinstatement of $16M and a second limit reinstatement of up to $16M for the second layer, subject to reinstatement premium, which attaches after the first reinstatement has been completely exhausted. Historically, the prepaid limit reinstatement and second limit reinstatement ranged from $16M to $21M. All limit reinstatements thereafter require no additional premium. Effective October 1, 2021, limits can be reinstated a maximum of four times.
(2) Prior to October 1, 2020, retention was $1M.
(3) Historically, retention has ranged from 0% to 32.5%.
(4) Historically, retention has ranged from $1M to $2M.
(5) Subject to a limit of $20M per individual claimant. If an individual loss were to exceed this level the Company would retain this excess exposure. Historically, the limit per individual claimant has ranged from $15M to $20M.
(6) Historically, retention has ranged from $0.5M to $0.75M.
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Other Reinsurance Arrangements
For the workers' compensation business ceded to Inova Re; each SPC has in place its own reinsurance arrangements, which are illustrated in the following table.
Segregated Portfolio Cell Reinsurance
Per Occurrence Coverage Aggregate Coverage
(1) The attachment point is based on a percentage of written premium within individual cells, ranges from 85% to 94%, and varies by cell.
Taxes
We are subject to the tax laws and regulations of the U.S., Cayman Islands and U.K. We file a consolidated U.S. federal income tax return that includes the parent company and its U.S. subsidiaries, except for ProAssurance American Mutual, A Risk Retention Group. Our filing obligations include a requirement to make quarterly payments of estimated taxes to the IRS using the corporate tax rate effective for the tax year. During the second quarter of 2025, we made an income tax extension payment of $2.8 million for the 2024 tax year.
The CARES Act that was signed into law on March 27, 2020 included the initial version of the ERC which was extended and expanded in December 2020 and March 2021. See further discussion of the ERC in Note 1 of the Notes to Consolidated Financial Statements in our December 31, 2024 report on Form 10-K. As an eligible employer under the provisions of the CARES Act, NORCAL filed a claim for a payroll tax refund during the second quarter of 2023, based on eligible wages paid during 2020, that resulted in a tax refund of $4.4 million, including $0.6 million of related interest accrued, which was received in April 2025.
As a result of the NORCAL acquisition, we have U.S. federal NOL carryforwards, which were approximately $15.2 million as of September 30, 2025. These NOL carryforwards are subject to limitation by Internal Revenue Code Section 382 and will begin to expire in 2035.
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Investing Activities and Related Cash Flows
Our investments at September 30, 2025 and December 31, 2024 are comprised as follows:
September 30, 2025 December 31, 2024
($ in thousands) Carrying
Value % of Total Investment Carrying
Value % of Total Investment
Fixed maturities, available-for-sale
U.S. Treasury obligations $ 248,450 5 % $ 243,903 5 %
U.S. Government-sponsored enterprise obligations 10,026 1 % 14,894 1 %
State and municipal bonds 451,391 10 % 446,601 10 %
Corporate debt 1,744,235 39 % 1,727,775 40 %
Residential mortgage-backed securities 552,081 12 % 478,799 11 %
Commercial mortgage-backed securities 211,028 5 % 208,513 5 %
Other asset-backed securities 461,971 10 % 461,722 10 %
Total fixed maturities, available-for-sale 3,679,182 82 % 3,582,207 82 %
Fixed maturities, trading 12,390 1 % 53,157 1 %
Total fixed maturities 3,691,572 83 % 3,635,364 83 %
Equity investments(1)
110,198 2 % 130,158 3 %
Short-term investments 291,345 6 % 254,922 5 %
BOLI 82,346 2 % 80,179 2 %
Investment in unconsolidated subsidiaries 253,085 6 % 259,538 6 %
Other investments 9,309 1 % 7,266 1 %
Total investments $ 4,437,855 100 % $ 4,367,427 100 %
(1) Includes $81.2 million and $101.2 million of investment grade bond funds as of September 30, 2025 and December 31, 2024, respectively, which are not subject to significant equity price risk.
At September 30, 2025, 99% of our investments in available-for-sale fixed maturity securities were rated and the average rating was A+. The distribution of our investments in available-for-sale fixed maturity securities by rating were as follows:
September 30, 2025 December 31, 2024
($ in thousands)
Carrying
Value % of Total Investment Carrying
Value % of Total Investment
Rating*
AAA $ 547,945 15 % $ 571,139 16 %
AA+ 762,865 21 % 710,841 20 %
AA 188,540 5 % 208,986 6 %
AA- 173,173 5 % 174,349 5 %
A+ 240,742 6 % 248,353 7 %
A 409,277 11 % 413,259 11 %
A- 428,550 11 % 381,746 11 %
BBB+ 211,411 6 % 197,142 5 %
BBB 310,614 8 % 297,266 8 %
BBB- 152,445 4 % 138,693 4 %
Below investment grade 252,791 7 % 239,577 6 %
Not rated 829 1 % 856 1 %
Total $ 3,679,182 100 % $ 3,582,207 100 %
*Average of three NRSRO sources, presented as an S&P equivalent. Source: S&P, Copyright ©2025, S&P Global Market Intelligence
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A detailed listing of our investment holdings as of September 30, 2025 is located under the Financials heading on the Investor Relations page of our website which can be reached directly at https://investor.proassurance.com/financial-information/quarterly-investment-supplements/default.aspx or through links from the Investor Relations section of our website, https://investor.proassurance.com/corporate-profile/default.aspx.
We manage our investments to ensure that we will have sufficient liquidity to meet our obligations, taking into consideration the timing of cash flows from our investments, including interest payments, dividends and principal payments, as well as the expected cash flows to be generated or used by our operations. In addition to the interest and dividends we will receive from our investments, we anticipate that between $90 million and $170 million of our portfolio will mature (or be paid down) each quarter over the next twelve months and become available, if needed, to meet our cash flow requirements. Our reinvestment rate of cash flows compared to recent years is more intermittent due to anticipated higher severity and paid loss trends in our MPL line of business and our Workers' Compensation Insurance segment. From time to time our cash balances will fluctuate depending on the actual timing of paid losses. The primary outflow of cash at our insurance subsidiaries is related to paid losses and operating costs, including income taxes. The payment of individual claims cannot be predicted with certainty; therefore, we rely upon the history of paid claims in estimating the timing of future claims payments with consideration given to current and anticipated industry trends and macroeconomic conditions. To the extent that we may have an unanticipated shortfall in cash, we may either liquidate securities or borrow funds under existing borrowing arrangements through our Revolving Credit Agreement and the FHLB system. As of October 30, 2025, $175 million could be made available for use through our Revolving Credit Agreement, as discussed in this section under the heading "Debt." Given the duration of our investments, we do not foresee a shortfall that would require us to meet operating cash needs through additional borrowings. Additional information regarding our Revolving Credit Agreement is detailed in Note 7 of the Notes to Condensed Consolidated Financial Statements.
At September 30, 2025, our FAL was comprised of cash and cash equivalents and investment securities deposited with Lloyd's which had a fair value of $17.4 million. During the first and third quarters of 2025, we increased our FAL in order to support accumulated losses from prior years, stemming primarily from aviation and catastrophe related losses. Additional information regarding our FAL is detailed in Note 3 of the Notes to Condensed Consolidated Financial Statements.
Our investment portfolio continues to be primarily composed of high quality fixed income securities with approximately 92% of our fixed maturities being investment grade securities as determined by national rating agencies. The weighted average effective duration of our fixed maturity securities at September 30, 2025 was 3.35 years; the weighted average effective duration of our fixed maturity securities combined with our short-term securities was 3.11 years.
The carrying value and unfunded commitments for certain of our investments were as follows:
Carrying Value September 30, 2025
($ in thousands, except expected funding period) September 30, 2025 December 31, 2024 Unfunded Commitment Expected funding period in years
Qualified affordable housing project tax credit partnerships (1)
$ 259 $ 247 $ 30 2
All other investments, primarily investment fund LPs/LLCs 252,826 259,291 207,711 5
Total $ 253,085 $ 259,538 $ 207,741
(1) The carrying value reflects our total commitments (both funded and unfunded) to the partnerships, less any amortization, since our initial investment. We fund these investments based on funding schedules maintained by the partnerships.
Investment fund LPs/LLCs are by nature less liquid and may involve more risk than other investments. We manage our risk through diversification of asset class and geographic location. At September 30, 2025, we had investments in 33 separate investment funds with a total carrying value of $252.8 million which represented approximately 6% of our total investments. Our investment fund LPs/LLCs generate earnings from trading portfolios, secured debt, debt securities, multi-strategy funds and private equity investments, and the performance of these LPs/LLCs is affected by the volatility of equity and credit markets. For our investments in LPs/LLCs, we record our allocable portion of the partnership operating income or loss as the results of the LPs/LLCs become available, typically following the end of a reporting period. As of September 30, 2025, our total funding commitments legally outstanding related to our investments in LPs/LLCs were approximately $207.7 million; however, we anticipate capital of approximately $128 million to be drawn based on our current estimates.
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Financing Activities and Related Cash Flows
Debt
Our outstanding debt consisted of the following:
($ in thousands) September 30,
2025 December 31,
2024
Contribution Certificates $ 182,158 $ 181,163
Revolving Credit Agreement
125,000 125,000
Term Loan 115,625 120,313
Total principal 422,783 426,476
Less unamortized debt issuance costs 1,260 1,603
Debt less unamortized debt issuance costs $ 421,523 $ 424,873
Additional information regarding our debt is provided in Note 7 of the Notes to Condensed Consolidated Financial Statements and Note 10 of the Notes to Consolidated Financial Statements in our December 31, 2024 report on Form 10-K.
To manage our exposure to interest rate risk due to variability in the base rate on borrowings under the Revolving Credit Agreement and Term Loan, we entered into two forward-starting interest rate swap agreements ("Interest Rate Swaps"). Additional information regarding our Interest Rate Swaps is provided in Note 8 of the Notes to Condensed Consolidated Financial Statements.
Two of our insurance subsidiaries are members of an FHLB. Through membership, those subsidiaries have access to secured cash advances which can be used for liquidity purposes or other operational needs. In order for us to use FHLB proceeds, regulatory approvals may be required depending on the nature of the transaction. To date, those subsidiaries have not materially utilized their membership for borrowing purposes.
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Results of Operations – Three and Nine Months Ended September 30, 2025 Compared to Three and Nine Months Ended September 30, 2024
Selected consolidated financial data for each period is summarized in the table below.
Three Months Ended September 30 Nine Months Ended September 30
($ in thousands, except per share data) 2025 2024 Change 2025 2024 Change
Revenues:
Net premiums written $ 261,339 $ 279,546 $ (18,207) $ 733,029 $ 765,130 $ (32,101)
Net premiums earned $ 233,404 $ 243,160 $ (9,756) $ 702,086 $ 727,176 $ (25,090)
Net investment result 45,173 42,039 3,134 129,656 124,110 5,546
Net investment gains (losses) 841 2,252 (1,411) (626) 5,146 (5,772)
Other income (expense) 136 (2,198) 2,334 (2,731) 3,872 (6,603)
Total revenues 279,554 285,253 (5,699) 828,385 860,304 (31,919)
Expenses:
Net losses and loss adjustment expenses 186,199 176,331 9,868 536,097 557,025 (20,928)
Underwriting, policy acquisition and operating expenses 81,418 80,389 1,029 245,521 238,408 7,113
SPC U.S. federal income tax expense (benefit) 658 377 281 1,913 1,043 870
SPC dividend expense (income) 1,674 1,360 314 3,762 2,479 1,283
Interest expense 5,236 5,698 (462) 15,620 17,004 (1,384)
Total expenses 275,185 264,155 11,030 802,913 815,959 (13,046)
Income (loss) before income taxes 4,369 21,098 (16,729) 25,472 44,345 (18,873)
Income tax expense (benefit) 2,923 4,657 (1,734) 7,927 7,770 157
Net income (loss) $ 1,446 $ 16,441 $ (14,995) $ 17,545 $ 36,575 $ (19,030)
Non-GAAP operating income (loss) $ 7,896 $ 16,454 $ (8,558) $ 41,474 $ 30,426 $ 11,048
Earnings (loss) per share:
Basic $ 0.03 $ 0.32 $ (0.29) $ 0.34 $ 0.72 $ (0.38)
Diluted $ 0.03 $ 0.32 $ (0.29) $ 0.34 $ 0.71 $ (0.37)
Non-GAAP operating income (loss) per share:
Basic $ 0.15 $ 0.32 $ (0.17) $ 0.81 $ 0.60 $ 0.21
Diluted $ 0.15 $ 0.32 $ (0.17) $ 0.80 $ 0.59 $ 0.21
Net loss ratio 79.8 % 72.5 % 7.3 pts 76.4 % 76.6 % (0.2 pts)
Underwriting expense ratio 34.9 % 33.1 % 1.8 pts 35.0 % 32.8 % 2.2 pts
Combined ratio 114.7 % 105.6 % 9.1 pts 111.4 % 109.4 % 2.0 pts
Non-GAAP combined ratio (1)
112.2 % 106.4 % 5.8 pts 108.8 % 110.0 % (1.2 pts)
Operating ratio 97.4 % 90.3 % 7.1 pts 94.8 % 94.6 % 0.2 pts
Non-GAAP operating ratio (1)
94.8 % 90.7 % 4.1 pts 92.1 % 94.8 % (2.7 pts)
Effective tax rate 66.9 % 22.1 % 44.8 pts 31.1 % 17.5 % 13.6 pts
Return on equity (2)
0.4 % 5.6 % (5.2 pts) 1.9 % 4.2 % (2.3 pts)
Non-GAAP operating return on equity (2)
2.4 % 5.6 % (3.2 pts) 4.4 % 3.5 % 0.9 pts
(1) Refer to the Executive Summary of Operations section under the heading "Non-GAAP Adjusted Key Ratios" for a reconciliation of our key ratios to Non-GAAP adjusted key ratios.
(2) Annualized. See further discussion on this calculation in the Executive Summary of Operations section under the heading "Non-GAAP Operating ROE."
In all tables that follow, the abbreviation "nm" indicates that the information or the percentage change is not meaningful.
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Executive Summary of Operations
The following sections provide an overview of our consolidated and segment results of operations for the three and nine months ended September 30, 2025 as compared to the three and nine months ended September 30, 2024. See the Segment Results sections that follow for additional information regarding each segment's results.
Revenues
The following table shows our consolidated and segment net premiums earned:
Three Months Ended September 30 Nine Months Ended September 30
($ in thousands) 2025 2024 Change 2025 2024 Change
Net premiums earned
Specialty P&C $ 180,787 $ 188,704 $ (7,917) (4.2 %) $ 543,351 $ 562,137 $ (18,786) (3.3 %)
Workers' Compensation Insurance 40,972 41,829 (857) (2.0 %) 124,038 124,692 (654) (0.5 %)
Segregated Portfolio Cell Reinsurance 11,645 12,627 (982) (7.8 %) 34,697 40,347 (5,650) (14.0 %)
Consolidated total $ 233,404 $ 243,160 $ (9,756) (4.0 %) $ 702,086 $ 727,176 $ (25,090) (3.5 %)
For the three and nine months ended September 30, 2025, consolidated net premiums earned decreased $9.8 million and $25.1 million, respectively, as compared to the same respective periods of 2024.
•For our Specialty P&C segment, net premiums earned decreased during the 2025 three- and nine-month periods as compared to the same respective periods of 2024 driven by our ceased participation in Syndicate 1729 for the 2024 underwriting year and, to a lesser extent, the pro rata effect of a decrease in the volume of premium written during the preceding twelve months, primarily due to proactive actions taken in certain lines to improve profitability.
•For our Workers' Compensation Insurance segment, net premiums earned decreased for the 2025 three- and nine-month periods as compared to the same respective periods of 2024 driven by lower audit premium, changes in our carried EBUB estimate and the pro rata effect of a decrease in the volume of written premium during the preceding twelve months. The decrease for the 2025 nine-month period was partially offset by the impact of a $1.6 million reduction in reinstatement premium during the 2025 nine-month period as compared to an increase of $0.7 million in the same period of 2024.
•Net premiums earned in our Segregated Portfolio Cell Reinsurance segment decreased for the 2025 three- and nine-month periods as compared to the same respective periods of 2024 reflecting the non-renewal of three SPCs during 2024 and the non-renewal of three SPCs during 2025.
The following table shows our consolidated net investment result:
Three Months Ended September 30 Nine Months Ended September 30
($ in thousands) 2025 2024 Change 2025 2024 Change
Net investment income $ 40,442 $ 37,272 $ 3,170 8.5 % $ 116,326 $ 107,727 $ 8,599 8.0 %
Equity in earnings (loss) of unconsolidated subsidiaries
4,731 4,767 (36) (0.8 %) 13,330 16,383 (3,053) (18.6 %)
Net investment result $ 45,173 $ 42,039 $ 3,134 7.5 % $ 129,656 $ 124,110 $ 5,546 4.5 %
The increase in our consolidated net investment income for the three and nine months ended September 30, 2025 as compared to the same respective periods of 2024 reflected higher average book yields as we take advantage of the current interest rate environment. Our equity in earnings of unconsolidated subsidiaries decreased for the 2025 three- and nine-month periods as compared to the same respective periods of 2024 driven by the performance of certain LPs/LLCs. These results are typically reported on a one-quarter lag, and the decrease reflected lower market valuations during the first half of 2025.
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The following table shows our total consolidated net investment gains (losses):
Three Months Ended September 30 Nine Months Ended September 30
($ in thousands) 2025 2024 Change 2025 2024 Change
Net impairment losses recognized in earnings $ (1,256) $ (1,801) $ 545 (30.3 %) $ (631) $ (3,200) $ 2,569 (80.3 %)
Contingent Consideration remeasurement gain(1)
— — — nm — 6,500 (6,500) (100.0 %)
Other net investment gains (losses)
2,097 4,053 (1,956) (48.3 %) 5 1,846 (1,841) (99.7 %)
Net investment gains (losses) $ 841 $ 2,252 $ (1,411) (62.7 %) $ (626) $ 5,146 $ (5,772) (112.2 %)
(1) Represents the change in the fair value of contingent consideration issued in connection with the NORCAL acquisition. We do not consider these adjustments in assessing the financial performance of any of our segments and therefore, we excluded them from the Segment Results sections that follow. See Note 12 of the Notes to Condensed Consolidated Financial Statements for a reconciliation of our segment results to our consolidated results.
During the three and nine months ended September 30, 2025, we recognized $1.3 million and $0.6 million of credit-related impairment losses in earnings, respectively, and $0.6 million and $0.5 million of non-credit impairment losses in OCI, respectively, primarily related to corporate bonds in the consumer, communication and real estate sectors. For the three and nine months ended September 30, 2024, we recognized $1.8 million and $3.2 million of credit-related impairment losses in earnings, respectively, primarily related to corporate bonds in the real estate sector. Additional information regarding investment impairment losses is provided in Note 3 of the Notes to Condensed Consolidated Financial Statements.
We recognized other net investment gains of $2.1 million for the three months ended September 30, 2025 and a nominal amount of other net investment gains for the nine months ended September 30, 2025 primarily driven by unrealized holding gains from changes in the fair value of our equity investments. The other net investment gains for the 2025 nine-month period were largely offset by realized losses from the sale of certain available-for-sale fixed maturities. We recognized $4.1 million and $1.8 million of other net investment gains for the three and nine months ended September 30, 2024, respectively, primarily driven by unrealized holding gains resulting from changes in the fair value of our equity investments.
Consolidated other income (expense) for the three and nine months ended September 30, 2025 as compared to the same period of 2024 was comprised as follows:
Three Months Ended September 30 Nine Months Ended September 30
($ in thousands) 2025 2024 Change 2025 2024 Change
Foreign currency exchange rate gains (losses)
$ (1,003) $ (3,849) $ 2,846 (73.9 %) $ (10,040) $ (1,409) $ (8,631) 612.6 %
Other 1,139 1,651 (512) (31.0 %) 7,309 5,281 2,028 38.4 %
Other income (expense)
$ 136 $ (2,198) $ 2,334 106.2 % $ (2,731) $ 3,872 $ (6,603) (170.5 %)
Excluding foreign currency exchange rate losses, other income decreased for the 2025 three-month period and increased for the 2025 nine-month period as compared to the same respective periods of 2024. The decrease for the 2025 three-month period was driven by lower facilities income due to the sale of our Franklin, TN property to an unrelated third party during the first quarter of 2025. The increase for the 2025 nine-month period was driven by proceeds of $1.0 million associated with the sale of the renewal rights related to our legal professional liability book of business to an unrelated third party during the second quarter of 2025 in our Specialty P&C segment and a gain of $2.2 million associated with the aforementioned sale of our Franklin, TN property.
Foreign currency exchange rate gains (losses) are reported in our Corporate segment and are primarily related to foreign currency denominated balances associated with international insurance exposures, primarily related to our strategic partnership with an international medical professional liability insured in our Specialty P&C segment. Due to the size of the loss reserves associated with these international exposures, even nominal movements in exchange rates can lead to volatility in our results of operations.
Beginning in 2025, foreign currency exchange rate gains (losses) include the impacts of our utilization of foreign currency forward contracts. Historically, we mitigated foreign currency exchange exposure by matching the currency and duration of associated investments to the corresponding loss reserves. However, when we invest in foreign currency denominated available-for-sale fixed maturities, in accordance with GAAP, the change in market value due to changes in foreign currency exchange rates is reflected as part of OCI. Conversely, the impact of changes in foreign currency exchange rates on loss reserves is reflected through net income (loss) as a component of other income (expense).
During the first quarter of 2025 we changed our hedging strategy around foreign currency exchange exposures. Instead of investing in foreign currency denominated investments, we began utilizing foreign currency forward contracts. As these
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forward contracts are designated as economic hedges (non-hedging instruments), the change in fair value of these contracts is reflected through net income (loss) as a component of other income (expense) which is intended to hedge against foreign currency exchange rate gains (losses) related to foreign currency denominated balances also recognized within other income (expense) in the same period. Additional information regarding our foreign currency forward contracts is provided in Note 8 of the Notes to the Condensed Consolidated Financial Statements. Due to our change in hedging strategy, we sold a majority of our foreign currency denominated available-for-sale fixed maturities during the first quarter of 2025. Those investments generated a foreign currency exchange rate gain due to movements in exchange rates from December 31, 2024 to March 31, 2025 which economically hedged against the foreign currency exchange rate losses recognized related to the reserve during the same period. However, due to the sale of those investments, accumulated foreign currency exchange rate losses of $6.5 million were reclassified from AOCI to earnings and are included in other income (expense) in the 2025 nine-month period. While the volatility in foreign currency exchange rates had an outsized impact on our results of operations in the 2025 nine-month period, the overall impact on our financial position was nominal due to our hedging strategies.
Expenses
The following table shows our consolidated and segment net loss ratios and net prior accident year reserve development.
Three Months Ended September 30 Nine Months Ended September 30
($ in millions) 2025 2024 Change 2025 2024 Change
Current accident year net loss ratio
Consolidated ratio
81.3 % 81.5 % (0.2 pts) 80.6 % 80.5 % 0.1 pts
Specialty P&C
83.2 % 82.7 % 0.5 pts 82.7 % 82.1 % 0.6 pts
Workers' Compensation Insurance 75.0 % 77.0 % (2.0 pts) 75.0 % 77.0 % (2.0 pts)
Segregated Portfolio Cell Reinsurance 74.0 % 77.9 % (3.9 pts) 68.8 % 69.5 % (0.7 pts)
Calendar year net loss ratio
Consolidated ratio
79.8 % 72.5 % 7.3 pts 76.4 % 76.6 % (0.2 pts)
Specialty P&C
82.6 % 72.2 % 10.4 pts 78.3 % 77.3 % 1.0 pts
Workers' Compensation Insurance
75.0 % 77.0 % (2.0 pts) 74.2 % 77.0 % (2.8 pts)
Segregated Portfolio Cell Reinsurance
52.6 % 61.8 % (9.2 pts) 54.0 % 65.6 % (11.6 pts)
Favorable (unfavorable) reserve development, prior accident years
Consolidated $ 3.5 $ 21.8 $ (18.3) $ 30.0 $ 28.7 $ 1.3
Specialty P&C $ 1.0 $ 19.7 $ (18.7) $ 23.8 $ 27.2 $ (3.4)
Workers' Compensation Insurance
$ — $ — $ — $ 1.0 $ — $ 1.0
Segregated Portfolio Cell Reinsurance
$ 2.5 $ 2.1 $ 0.4 $ 5.2 $ 1.5 $ 3.7
Each segment's contribution to the change in our consolidated current accident year net loss ratios for the three and nine months ended September 30, 2025 as compared to the same respective periods of 2024 is as follows:
Increase (Decrease)
2025 versus 2024
(In percentage points) Comparative
three-month
periods Comparative
nine-month
periods
Estimated ratio increase (decrease) attributable to:
Specialty P&C (1)
0.3 pts 0.4 pts
Workers' Compensation Insurance (2)
(0.3 pts) (0.3 pts)
Segregated Portfolio Cell Reinsurance (3)
(0.2 pts) — pts
Increase (decrease) in the consolidated current accident year net loss ratio
(0.2 pts) 0.1 pts
(1) For the three and nine months ended September 30, 2025, the increase in the current accident year net loss ratio for our Specialty P&C segment was driven by premium adjustments related to loss sensitive policies, changes in the mix of business and, for the nine months ended September 30, 2025, losses incurred from our Lloyd's Syndicates operations, which is currently in run-off.
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(2) While we continue to consider the impact of medical cost inflation on our Workers' Compensation Insurance segment's loss results, the improvement in the current accident year net loss ratio for the 2025 three- and nine-month periods reflects our cost control initiatives implemented during the first quarter of 2025.
(3) The improvement in the Segregated Portfolio Cell Reinsurance segment's current accident year net loss ratio for the three months ended September 30, 2025 reflects a reduction in average claim severity, partially offset by changes in estimated program year aggregate reinsurance recoveries.
Our consolidated calendar year net loss ratio can be lower than or higher than our consolidated current accident year net loss ratio due to the recognition of either favorable or unfavorable prior accident year reserve development, respectively. For all periods presented, total net prior accident year reserve development included the favorable impacts of purchase accounting amortization, as shown in the following table.
Three Months Ended September 30 Nine Months Ended September 30
($ in thousands) 2025 2024 Change 2025 2024 Change
Net favorable (unfavorable) reserve development $ 2,800 $ 20,767 $ (17,967) (86.5 %) $ 27,293 $ 24,391 $ 2,902 11.9 %
NORCAL Acquisition - Purchase Accounting Amortization
668 1,006 (338) (33.6 %) 2,682 4,318 (1,636) (37.9 %)
Total net favorable (unfavorable) reserve development $ 3,468 $ 21,773 $ (18,305) (84.1 %) $ 29,975 $ 28,709 $ 1,266 4.4 %
Excluding purchase accounting amortization, consolidated net favorable reserve development recognized in the three and nine months ended September 30, 2025 was largely attributable to our MPL line of business in our Specialty P&C segment principally related to accident years 2018 through 2022 and, to a lesser extent, the workers' compensation business in our Segregated Portfolio Cell Reinsurance segment, partially offset by net unfavorable reserve development associated with our discontinued Lloyd's Syndicates operations driven by higher than expected losses and development on certain large claims, primarily aviation related losses. See the Segment Results sections that follow for additional information regarding each segment's current accident year net loss ratio and net prior accident year reserve development.
Our consolidated and segment underwriting expense ratios were as follows:
Three Months Ended September 30 Nine Months Ended September 30
2025 2024 Change 2025 2024 Change
Underwriting Expense Ratio
Consolidated (1)
34.9 % 33.1 % 1.8 pts 35.0 % 32.8 % 2.2 pts
Specialty P&C 28.2 % 27.5 % 0.7 pts 27.0 % 27.4 % (0.4 pts)
Workers' Compensation Insurance 38.5 % 34.4 % 4.1 pts 38.8 % 35.3 % 3.5 pts
Segregated Portfolio Cell Reinsurance 35.7 % 32.8 % 2.9 pts 35.3 % 35.0 % 0.3 pts
Corporate (2)
3.4 % 4.2 % (0.8 pts) 3.5 % 3.7 % (0.2 pts)
(1) Consolidated operating expenses for the three and nine months ended September 30, 2025 include $3.0 million and $14.6 million, respectively, of transaction-related costs associated with the proposed merger transaction with The Doctors Company. Consolidated operating expenses for the nine months ended September 30, 2024 include $0.3 million of actuarial consulting fees paid in connection with the final determination of contingent consideration associated with the acquisition of NORCAL. These transaction-related costs are not included in a segment as we do not consider these costs in assessing the financial performance of any of our operating or reportable segments. See Note 12 of the Notes to Condensed Consolidated Financial Statements for a reconciliation of our segment results to our consolidated results.
(2) There are no net premiums earned associated with the Corporate segment. Ratios shown are the contribution of the Corporate segment to the consolidated ratio (Corporate operating expenses divided by consolidated net premiums earned).
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The change in our consolidated underwriting expense ratios for the 2025 three- and nine-month periods as compared to the same respective periods of 2024 was primarily due to the following:
Increase (Decrease)
2025 versus 2024
(In percentage points) Comparative
three-month
periods Comparative
nine-month
periods
Estimated ratio increase (decrease) attributable to:
Change in Net Premiums Earned and DPAC amortization(1)
1.7 pts 0.5 pts
Transaction-related costs
1.3 pts 2.0 pts
Tail premium(2)
(0.5 pts) (0.5 pts)
All other, net (0.7 pts) 0.2 pts
Increase in the underwriting expense ratio 1.8 pts 2.2 pts
(1) Excludes tail premium and, for the 2025 nine-month period, the impact of a ceded premium adjustment related to prior accident years. See further discussion on the ceded premium adjustment in the Segment Results - Specialty Property & Casualty section that follows under the heading "Ceded Premiums Ratio."
(2) Represents the impact of the tail premium written in the period as these premiums are typically fully earned when written with minimal associated expenses.
Excluding the impact of the items specifically identified in the table above, our consolidated expense ratio decreased by 0.7 percentage points for the three months ended September 30, 2025 and remained relatively unchanged for the nine months ended September 30, 2025. The decrease for the 2025 three-month period was driven by lower compensation-related costs in our Specialty P&C and Corporate segments and lower professional fees, partially offset by the prior year impact of the recovery of guaranty fund assessments totaling $0.9 million in our Workers' Compensation Insurance segment.
As shown in the previous table, our consolidated underwriting expense ratio for the 2025 three-month period was also impacted by a one-time cumulative adjustment to 2025 DPAC amortization in our Specialty P&C segment, which was the driver of the 1.7 percentage point increase to the consolidated expense ratio. See the Segment Results - Specialty Property and Casualty section that follows for additional information regarding this one-time cumulative adjustment.
Taxes
Our consolidated provision for income taxes and effective tax rates for the nine months ended September 30, 2025 and 2024 were as follows:
($ in thousands)
Nine Months Ended September 30
2025 2024 Change
Income (loss) before income taxes $ 25,472 $ 44,345 $ (18,873) (42.6 %)
Income tax expense (benefit) 7,927 7,770 157 2.0 %
Net income (loss) $ 17,545 $ 36,575 $ (19,030) (52.0 %)
Effective tax rate 31.1% 17.5% 13.6 pts
Nine Months Ended September 30
2025 2024
Projected annual effective tax rate
25.2 % 17.5 %
Tax effect of discrete items
5.9 % — %
Total effective tax rate
31.1 % 17.5 %
We recognized an income tax expense of $7.9 million and $7.8 million during the nine months ended September 30, 2025 and 2024, respectively. See further discussion on our effective tax rate in the Segment Results - Corporate section that follows under the heading "Taxes."
Our projected annual effective tax rates were 25.2% and 17.5% as of September 30, 2025 and 2024, respectively, before discrete items were considered. As shown in the table above, these discrete items increased our effective tax rate by 5.9% for the 2025 nine-month period. The effective tax rate for the 2024 nine-month period approximated the projected annual effective tax rate as discrete items had minimal impact on the effective tax rate.
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Operating Ratio
Our operating ratio is our combined ratio, less our investment income ratio. This ratio provides the combined effect of underwriting profitability and investment income. Our consolidated operating ratios for the three and nine months ended September 30, 2025 and 2024 were as follows:
Three Months Ended September 30 Nine Months Ended September 30
2025 2024 Change 2025 2024 Change
Combined ratio 114.7 % 105.6 % 9.1 pts 111.4 % 109.4 % 2.0 pts
Less: investment income ratio 17.3 % 15.3 % 2.0 pts 16.6 % 14.8 % 1.8 pts
Operating ratio
97.4 % 90.3 % 7.1 pts 94.8 % 94.6 % 0.2 pts
The primary drivers of the change in our consolidated operating ratios were as follows:
Increase (Decrease)
2025 versus 2024
(In percentage points) Comparative
three-month
periods Comparative
nine-month
periods
Estimated ratio increase (decrease) attributable to:
Change in prior accident year reserve development
7.5 pts (0.3 pts)
Investment income
(2.0 pts) (1.8 pts)
Transaction-related costs
1.3 pts 2.0 pts
Non-core operations (1)
1.6 pts 1.1 pts
All other, net (1.3 pts) (0.8 pts)
Increase in the operating ratio
7.1 pts 0.2 pts
(1) Non-core operations include the net underwriting results from both our Lloyd's Syndicates operations and legal professional liability book of business within our Specialty P&C segment which are in run off. Net underwriting results exclude the impact of prior accident year reserve development and investment income associated with these operations, which are shown separately in the table above. See further discussion on these non-core operations in this section under the heading "Non-GAAP Financial Measures" and in the Segment Results - Specialty Property and Casualty section that follows.
Excluding the impact of the items specifically identified in the table above, our operating ratios for the 2025 three- and nine-month periods improved approximately 1.3 and 0.8 percentage points, respectively, as compared to the same respective periods of 2024 driven by an improvement in the current accident year net loss ratio in our Workers' Compensation Insurance segment and lower compensation-related costs in our Specialty P&C and Corporate segments. See previous discussion in this section under the heading "Expenses" and further discussion in our Segment Results sections that follow.
Non-GAAP Financial Measures
Non-GAAP Operating Income (Loss)
Non-GAAP operating income (loss) is a financial measure that is widely used to evaluate performance within the insurance sector. In calculating Non-GAAP operating income (loss), we have excluded the effects of the items listed in the following table that do not reflect normal results. We believe Non-GAAP operating income (loss) presents a useful view of the performance of our ongoing core insurance operations; however, it should be considered in conjunction with net income (loss) computed in accordance with GAAP.
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The following table is a reconciliation of net income (loss) to Non-GAAP operating income (loss):
Three Months Ended
September 30 Nine Months Ended
September 30
(In thousands, except per share data) 2025 2024 2025 2024
Net income (loss) $ 1,446 $ 16,441 $ 17,545 $ 36,575
Items excluded in the calculation of Non-GAAP operating income (loss):
Net investment (gains) losses (1)
(841) (2,252) 626 (5,146)
Net investment gains (losses) attributable to SPCs in which no profit/loss is retained (2)
554 416 1,238 1,743
Transaction-related costs (3)
2,983 — 14,578 320
Foreign currency exchange rate (gains) losses (4)
1,003 3,849 10,040 1,409
Non-operating income (5)
— — (3,162) —
Guaranty fund assessments (recoupments) (69) (899) 27 (871)
Non-core operations (6)
2,976 (818) 3,538 (2,550)
Pre-tax effect of exclusions 6,606 296 26,885 (5,095)
Tax effect, at 21% (7)
(156) (283) (2,956) (1,054)
After-tax effect of exclusions
6,450 13 23,929 (6,149)
Non-GAAP operating income (loss) $ 7,896 $ 16,454 $ 41,474 $ 30,426
Per diluted common share:
Net income (loss) $ 0.03 $ 0.32 $ 0.34 $ 0.71
Effect of exclusions 0.12 — 0.46 (0.12)
Non-GAAP operating income (loss) per diluted common share $ 0.15 $ 0.32 $ 0.80 $ 0.59
(1) Net investment gains (losses) recognized in earnings are primarily driven by changes in the value of investments that are marked to fair value each period, the nature and timing of which are unrelated to our normal operating results. In addition, net investment gains (losses) for the nine months ended September 30, 2024 include the $6.5 million decrease to the contingent consideration liability.
(2) Net investment gains (losses) on investments related to SPCs are recognized in our Segregated Portfolio Cell Reinsurance segment. SPC results, including any net investment gain or loss, that are attributable to external cell participants are reflected in the SPC dividend expense (income). To be consistent with our exclusion of net investment gains (losses) recognized in earnings, we are excluding the portion of net investment gains (losses) that is included in the SPC dividend expense (income) which is attributable to the external cell participants.
(3) Transaction-related costs in 2025 are attributable to professional fees incurred in relation to the proposed merger transaction with The Doctors Company. Additional information regarding the proposed merger transaction with The Doctors Company is provided in Note 1 of the Notes to the Condensed Consolidated Financial Statements. Transaction-related costs in 2024 are attributable to actuarial consulting fees paid during the second quarter of 2024 in relation to the final determination of contingent consideration associated with the NORCAL acquisition. We are excluding these costs as they do not reflect normal operating results and are unique and non-recurring in nature.
(4) Foreign currency exchange rate gains (losses) are reported in our Corporate segment and are primarily related to foreign currency denominated balances associated with international insurance exposures, primarily related to our strategic partnership with an international medical professional liability insured in our Specialty P&C segment. Due to the size of the loss reserves associated with these international exposures, even nominal movements in exchange rates can lead to volatility in our results of operations. We exclude foreign currency exchange rate movements as the nature and timing of these changes are not indicative of our normal core operating results. See previous discussion in this section under the heading "Revenues."
(5) Non-operating income in the 2025 nine-month period reflects proceeds of $1.0 million associated with the sale of the renewal rights related to our legal professional liability book of business to an unrelated third party in the second quarter of 2025 as well as a gain of $2.2 million associated with the sale of our Franklin, TN property to an unrelated third party in the first quarter of 2025. See additional discussion on the legal professional liability transaction in the Segment Results - Specialty Property and Casualty section under the heading "Gross Premium Written" that follows. We are excluding these items as they do not reflect normal operating results and are unique and non-recurring in nature.
(6) Non-core operations include the net underwriting results from operations that are currently in run-off but do not qualify for Discontinued Operations accounting treatment under GAAP. These operations include our Lloyd's Syndicates operations from our previous participation in Syndicate 1729 and Syndicate 6131 as well as our legal professional liability book of business. Net investment gains (losses) recognized in earnings associated with these operations are included in the adjustment for consolidated net investment gains (losses) as described in footnote 1.
(7) The 21% rate is the annual expected statutory tax rate associated with the taxable or tax deductible items listed above. We utilized the estimated annual effective tax rate method for the three and nine months ended September 30, 2025 and 2024. See further discussion on this method in the Critical Accounting Estimates section under the heading "Estimation of Taxes" and in Note 4 of the Notes to Condensed Consolidated Financial Statements. For both the 2025 and 2024 periods, our effective tax rate was applied to these items in calculating net income (loss), excluding net investment gains (losses) and related adjustments which were treated as discrete items and were tax effected at the annual expected statutory tax rate (21%) in the period they were included in our consolidated tax provision and net income (loss). The taxes associated with the net investment gains (losses) related to SPCs in our Segregated Portfolio Cell Reinsurance segment are paid by the individual SPCs and are not included in our consolidated tax provision or net income (loss); therefore, both the net investment gains (losses) from our Segregated Portfolio Cell Reinsurance segment and the adjustment to exclude the portion of net investment gains (losses) included in the SPC dividend expense (income) in the table above are not tax effected. There are no taxes associated with our Lloyd’s
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Syndicates operations in our consolidated tax provision due to the availability of net operating losses and the full valuation allowance recorded against the deferred tax assets. Accordingly, all adjustments related to our Lloyd's Syndicates operations in the table above are not tax effected. The portion of transaction-related costs that is tax deductible was tax effected at the statutory tax rate (21%) while the remaining non-deductible portion was not tax effected as there was no associated income tax benefit.
Non-GAAP Adjusted Key Ratios
Certain key performance ratios include the impact of certain before-tax effects of items that do not reflect normal operating results, as discussed in the previous table. We believe adjusting our key ratios for these items presents a useful view of the performance of our ongoing core insurance operations; however, it should be considered in conjunction with ratios computed in accordance with GAAP.
Our consolidated key ratios for the three and nine months ended September 30, 2025 and 2024 include the impact of net underwriting results related to non-core operations, guaranty fund assessments and transaction-related costs (see previous discussion on these items in the previous table). Non-core operations include an underwriting loss of $3.4 million and $4.6 million for the 2025 three- and nine-month periods, respectively, associated with our Lloyd's Syndicates operations as compared to underwriting income of $0.5 million and $1.7 million for the same respective periods of 2024. Also included in non-core operations are the underwriting results associated with our legal professional liability book of business which were nominal in amount for all periods presented.
The following table is a reconciliation of our consolidated key ratios to Non-GAAP adjusted key ratios for the three and nine months ended September 30, 2025 and 2024:
Three Months Ended September 30
Consolidated
2025 2024
As Reported Non-GAAP operating adjustments Non-GAAP Adjusted Ratios As Reported Non-GAAP operating adjustments Non-GAAP Adjusted Ratios
Current accident year net loss ratio 81.3 % 0.2 pts 81.5 % 81.5 % 0.3 pts 81.8 %
Effect of prior accident years’ reserve development (1.5 %) (1.6 pts) (3.1 %) (9.0 %) (0.1 pts) (9.1 %)
Net loss ratio 79.8 % (1.4 pts) 78.4 % 72.5 % 0.2 pts 72.7 %
Underwriting expense ratio 34.9 % (1.1 pts) 33.8 % 33.1 % 0.6 pts 33.7 %
Combined ratio 114.7 % (2.5 pts) 112.2 % 105.6 % 0.8 pts 106.4 %
Less: Investment Income Ratio 17.3 % 0.1 pts 17.4 % 15.3 % 0.4 pts 15.7 %
Operating ratio 97.4 % (2.6 pts) 94.8 % 90.3 % 0.4 pts 90.7 %
Nine Months Ended September 30
Consolidated
2025 2024
As Reported Non-GAAP operating adjustments Non-GAAP Adjusted Ratios As Reported Non-GAAP operating adjustments Non-GAAP Adjusted Ratios
Current accident year net loss ratio 80.6 % 0.2 pts 80.8 % 80.5 % 0.6 pts 81.1 %
Effect of prior accident years’ reserve development (4.2 %) (0.8 pts) (5.0 %) (3.9 %) (0.3 pts) (4.2 %)
Net loss ratio 76.4 % (0.6 pts) 75.8 % 76.6 % 0.3 pts 76.9 %
Underwriting expense ratio 35.0 % (2.0 pts) 33.0 % 32.8 % 0.3 pts 33.1 %
Combined ratio 111.4 % (2.6 pts) 108.8 % 109.4 % 0.6 pts 110.0 %
Less: Investment Income Ratio 16.6 % 0.1 pts 16.7 % 14.8 % 0.4 pts 15.2 %
Operating ratio 94.8 % (2.7 pts) 92.1 % 94.6 % 0.2 pts 94.8 %
Our Specialty P&C segment key ratios for the three and nine months ended September 30, 2025 and 2024 include the impact of net underwriting results related to non-core operations, as previously discussed, and guaranty fund assessments.
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The following table is a reconciliation of our Specialty P&C segment key ratios to Non-GAAP adjusted key ratios for the three and nine months ended September 30, 2025 and 2024:
Three Months Ended September 30
Specialty P&C segment
2025 2024
Segment As Reported Non-GAAP operating adjustments
Non-GAAP Adjusted Ratios
Segment As Reported Non-GAAP operating adjustments Non-GAAP Adjusted Ratios
Current accident year net loss ratio 83.2 % 0.2 pts 83.4 % 82.7 % 0.5 pts 83.2 %
Effect of prior accident years’ reserve development (0.6 %) (2.0 pts) (2.6 %) (10.5 %) (0.2 pts) (10.7 %)
Net loss ratio 82.6 % (1.8 pts) 80.8 % 72.2 % 0.3 pts 72.5 %
Underwriting expense ratio 28.2 % 0.1 pts 28.3 % 27.5 % — pts 27.5 %
Combined ratio 110.8 % (1.7 pts) 109.1 % 99.7 % 0.3 pts 100.0 %
Nine Months Ended September 30
Specialty P&C segment
2025 2024
Segment As Reported Non-GAAP operating adjustments
Non-GAAP Adjusted Ratios
Segment As Reported Non-GAAP operating adjustments Non-GAAP Adjusted Ratios
Current accident year net loss ratio 82.7 % 0.3 pts 83.0 % 82.1 % 0.9 pts 83.0 %
Effect of prior accident years’ reserve development (4.4 %) (1.0 pts) (5.4 %) (4.8 %) (0.4 pts) (5.2 %)
Net loss ratio 78.3 % (0.7 pts) 77.6 % 77.3 % 0.5 pts 77.8 %
Underwriting expense ratio 27.0 % (0.1 pts) 26.9 % 27.4 % 0.1 pts 27.5 %
Combined ratio 105.3 % (0.8 pts) 104.5 % 104.7 % 0.6 pts 105.3 %
Non-GAAP Operating ROE
Non-GAAP operating ROE is a financial measure that is calculated as annualized Non-GAAP operating income (loss) for the period divided by the average of beginning and ending total shareholders’ equity. As previously discussed, in calculating Non-GAAP operating income (loss), we have excluded the effects of certain items that do not reflect normal results. Non-GAAP operating ROE measures the overall after-tax profitability of our core insurance operations and shows how efficiently capital is being used; however, it should be considered in conjunction with ROE computed in accordance with GAAP. The following table is a reconciliation of ROE to Non-GAAP operating ROE for the three and nine months ended September 30, 2025 and 2024:
Three Months Ended
September 30 Nine Months Ended
September 30
2025 2024 Change 2025 2024 Change
ROE
0.4 % 5.6 % (5.2 pts) 1.9 % 4.2 % (2.3 pts)
Effect of items excluded in the calculation of Non-GAAP operating ROE
2.0 % — % 2.0 pts 2.5 % (0.7 %) 3.2 pts
Non-GAAP operating ROE 2.4 % 5.6 % (3.2 pts) 4.4 % 3.5 % 0.9 pts
Non-GAAP operating ROE for the 2025 three- and nine-month periods decreased by 3.2 percentage points and increased by 0.9 percentage points, respectively, as compared to the same respective periods of 2024. The decrease for the 2025 three-month period was driven by a lower amount of favorable prior accident year reserve development in our Specialty P&C segment. The increase for the 2025 nine-month period was driven by an increase in net investment income due to higher average book yields as we take advantage of the current interest rate environment. See previous discussions in this section under the heading "Executive Summary of Operations" and further discussion in our Segment Results sections that follow.
Non-GAAP Adjusted Book Value per Share
Book value per share is calculated as total GAAP shareholders’ equity divided by the total number of common shares outstanding at the balance sheet date. This ratio measures the net worth of the Company to shareholders on a per share basis.
Non-GAAP adjusted book value per share is a Non-GAAP measure widely used within the insurance sector and is calculated as total shareholders’ equity, excluding AOCI, divided by the total number of common shares outstanding at the
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balance sheet date. This Non-GAAP calculation measures the net worth of the Company to shareholders on a per share basis excluding AOCI to eliminate the temporary and potentially significant effects of fluctuations in interest rates on our fixed income portfolio; however, it should be considered in conjunction with book value per share computed in accordance with GAAP. Higher interest rates have led to significant unrealized holding losses on our available-for-sale fixed maturity investments resulting in volatility in AOCI in recent years. See Note 9 of the Notes to Condensed Consolidated Financial Statements for additional information.
The following table is a reconciliation of our book value per share to Non-GAAP adjusted book value per share at December 31, 2024 and September 30, 2025:
Book Value Per Share
Book Value Per Share at December 31, 2024 $ 23.49
Less: AOCI Per Share(1)
(3.37)
Non-GAAP Adjusted Book Value Per Share at December 31, 2024
26.86
Increase (decrease) to Non-GAAP Adjusted Book Value Per Share during the nine months ended September 30, 2025 attributable to:
Net income (loss) 0.34
Other(2)
(0.06)
Non-GAAP Adjusted Book Value Per Share at September 30, 2025
27.14
Add: AOCI Per Share(1)
(1.77)
Book Value Per Share at September 30, 2025 $ 25.37
(1) Primarily the impact of accumulated unrealized investment gains (losses) on our available-for-sale fixed maturity investments. See Note 9 of the Notes to Condensed Consolidated Financial Statements for additional information.
(2) Primarily the impact of an increase in common shares outstanding due to share-based compensation.
Book value increased $1.88 per share from December 31, 2024 to September 30, 2025 driven by the change in AOCI of $1.60 per share largely due to unrealized holding gains on our fixed income investment portfolio which flow directly to AOCI due to a decrease in interest rates since the end of 2024.
The increase of $0.28 per share in Non-GAAP adjusted book value per share from December 31, 2024 to September 30, 2025 reflected net income of $0.34 per share recognized during the nine months ended September 30, 2025, partially offset by the impact of share-based compensation and changes in common shares outstanding.

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Segment Results - Specialty Property & Casualty
Our Specialty P&C segment focuses on Medical Professional Liability insurance and Medical Technology Liability insurance as discussed in Note 16 of the Notes to Consolidated Financial Statements in our December 31, 2024 report on Form 10-K. The Specialty P&C segment also includes non-premium revenues generated outside of our insurance entities and the underwriting results from our participation in Syndicate 1729 and Syndicate 6131 at Lloyd's of London, which is currently in run off. As previously discussed under the heading "ProAssurance Overview," we changed the composition of our operating and reportable segments during the first quarter of 2025. As a result, we now report the financial results of our subsidiary IAO, Inc. d/b/a ProAssurance Agency in the Specialty P&C segment which were previously reported in the Corporate segment. All prior period segment information has been recast to conform to the current period presentation and the change in presentation had no impact on previously reported consolidated financial results. See further information regarding this presentation change in Note 12 of the Notes to Condensed Consolidated Financial Statements.
Segment results reflected the pre-tax profit or loss from these operations including the amortization of certain purchase accounting adjustments. Segment results included the following:
Three Months Ended September 30 Nine Months Ended September 30
($ in thousands) 2025 2024 Change 2025 2024 Change
Net premiums written
$ 205,616 $ 221,490 $ (15,874) (7.2 %) $ 562,208 $ 589,209 $ (27,001) (4.6 %)
Net premiums earned
$ 180,787 $ 188,704 $ (7,917) (4.2 %) $ 543,351 $ 562,137 $ (18,786) (3.3 %)
Other income (expense)
996 1,395 (399) (28.6 %) 6,904 4,984 1,920 38.5 %
Net losses and loss adjustment expenses (149,343) (136,337) (13,006) 9.5 % (425,338) (434,564) 9,226 (2.1 %)
Underwriting, policy acquisition and operating expenses
(50,921) (51,854) 933 (1.8 %) (146,564) (154,147) 7,583 (4.9 %)
Segment results $ (18,481) $ 1,908 $ (20,389) (1,068.6 %) $ (21,647) $ (21,590) $ (57) (0.3 %)
Net loss ratio
82.6% 72.2% 10.4 pts 78.3% 77.3% 1.0 pts
Underwriting expense ratio
28.2% 27.5% 0.7 pts 27.0% 27.4% (0.4 pts)
Non-GAAP Adjusted Ratios*
Net loss ratio
80.8% 72.5% 8.3 pts 77.6% 77.8% (0.2 pts)
Underwriting expense ratio
28.3% 27.5% 0.8 pts 26.9% 27.5% (0.6 pts)
*See previous discussion under the heading "Non-GAAP Adjusted Key Ratios."
Premiums Written
Changes in our premium volume within our Specialty P&C segment are generally driven by three primary factors: (1) the amount of new business written, (2) our retention of existing business and (3) the premium charged for business that is renewed, which is affected by rates charged and by the amount and type of coverage an insured chooses to purchase. In addition, premium volume may periodically be affected by shifts in the timing of renewals between periods.
The medical professional liability market, which accounts for a majority of the revenues in this segment, remains challenging as physicians continue joining hospitals or larger group practices and, therefore, are no longer purchasing individual or group policies in the standard market. In addition, some competitors have chosen to compete primarily on price. Those carriers have accumulated an excess of capital since approximately 2004 driven largely by drops in claims frequency. They now use that capital to generate higher investment returns supporting operating income over underwriting income. Both factors may impact our ability to write new business and retain existing business. Furthermore, the insurance and reinsurance markets have historically been cyclical, characterized by extended periods of intense price competition and other periods of reduced capacity. The medical professional liability market has historically been particularly affected by these cycles. Underwriting cycles are driven, among other reasons, by excess capacity available to compete for the business. Changes in the frequency and severity of losses may also affect the cycles of the insurance and reinsurance markets significantly.
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Gross, ceded and net premiums written were as follows:
Three Months Ended September 30 Nine Months Ended September 30
($ in thousands) 2025 2024 Change 2025 2024 Change
Gross premiums written $ 229,507 $ 244,007 $ (14,500) (5.9 %) $ 621,128 $ 645,902 $ (24,774) (3.8 %)
Less: Ceded premiums written 23,891 22,517 1,374 6.1 % 58,920 56,693 2,227 3.9 %
Net premiums written $ 205,616 $ 221,490 $ (15,874) (7.2 %) $ 562,208 $ 589,209 $ (27,001) (4.6 %)
Gross Premiums Written
Gross premiums written by component were as follows:
Three Months Ended September 30 Nine Months Ended September 30
($ in thousands) 2025 2024 Change 2025 2024 Change
Medical Professional Liability (1)(2)
$ 213,976 $ 226,521 $ (12,545) (5.5 %) $ 579,390 $ 590,761 $ (11,371) (1.9 %)
Medical Technology Liability (3)
11,829 12,563 (734) (5.8 %) 30,228 33,011 (2,783) (8.4 %)
Lloyd's Syndicates (4)
186 581 (395) (68.0 %) 79 5,827 (5,748) (98.6 %)
Other (5)
3,516 4,342 (826) (19.0 %) 11,431 16,303 (4,872) (29.9 %)
Total Gross Premiums Written $ 229,507 $ 244,007 $ (14,500) (5.9 %) $ 621,128 $ 645,902 $ (24,774) (3.8 %)
(1) Medical Professional Liability premium was our greatest source of premium revenues in 2025 and 2024. The decrease in MPL premium for the 2025 three- and nine-month periods as compared to the same respective periods of 2024 was driven by retention losses, partially offset by an increase in renewal pricing, new business written and, to a lesser extent, an increase in tail coverage premium. Retention losses during the 2025 three- and nine-month periods generally reflect our pursuit of rate adequacy in a competitive market where other carriers may not have the same profitability objectives, appreciate the rate need, or are attempting to gain market share despite near term underwriting losses which can be supported by investment returns from excess capital. Renewal pricing increases during the 2025 three- and nine-month periods reflect our response to the rising loss cost environment and new business reflects the competitive market conditions. See a description of our MPL line of business and additional discussion on competitive market conditions in Part I Item 1. Business under the heading "Specialty Property and Casualty Segment" and "Competition" in our December 31, 2024 report on Form 10-K, respectively.
(2) We offer alternative risk and self-insurance products on a customized basis. Our custom alternative risk solutions include a turnkey captive solution whereby we cede either all or a portion of the alternative market premium, net of reinsurance, to two SPCs of our wholly owned Cayman Islands reinsurance subsidiary, Inova Re, which is reported in our Segregated Portfolio Cell Reinsurance segment. See further discussion on alternative market gross premiums written in our Segment Results - Segregated Portfolio Cell Reinsurance section under the heading "Gross Premiums Written" that follows.
(3) Our Medical Technology Liability business is marketed throughout the U.S.; coverage is offered on a primary or excess basis, within specified limits, to manufacturers and distributors of medical technology and life sciences products including entities conducting human clinical trials. In addition to the previously listed factors that affect our premium volume, our Medical Technology Liability premium is also impacted by the sales volume of insureds. Our Medical Technology Liability premium decreased for the 2025 three- and nine-month periods as compared to the same respective periods of 2024 driven by retention losses, partially offset by new business written and an increase in renewal pricing primarily due to changes in sales volume and exposure of certain insureds. Retention losses during the 2025 three- and nine-month periods are primarily attributable to an increase in competition on terms and pricing, insureds no longer needing coverage including going out of business, non-payment and the broker losing the account.
(4) Our Lloyd's Syndicates business includes the results from our previous participation in Syndicate 1729 at Lloyd's of London, which is currently in run-off. Effective September 2023, we elected to discontinue our participation in the results of Syndicate 1729 beginning with the 2024 underwriting year. We normally report results from our Lloyd's Syndicates operations on a one quarter delay. Our ceased participation began to be reflected in our results in the second quarter of 2024. For the 2023 underwriting year our participation in the results of Syndicate 1729 was approximately 5%. Our Lloyd’s Syndicates premium for the 2025 three- and nine-month periods reflected the impact of our ceased participation.
(5) This component of gross premiums written includes all other product lines within our Specialty P&C segment, primarily professional liability coverage to attorneys and their firms in select areas of practice. On April 15, 2025, we sold the renewal rights related to our legal professional liability book of business to an unrelated third party for $1.0 million. As part of the terms of that transaction, we agreed to continue directly writing renewal policies for a limited period of time and entered
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into a 100% quota share reinsurance agreement with that third party. The transaction included the full operations of the business, including underwriting, claims management and transfer of select team members supporting the business. We retain responsibility for claim liabilities associated with all policies issued by us prior to the close of the transaction.
New business written, retention and the change in renewal pricing for our Specialty P&C segment and by major component, excluding Lloyd's Syndicates, are shown in the table below:
Three Months Ended September 30
2025 2024
($ in millions)
MPL Medical Technology Liability Other
Specialty P&C Segment
MPL Medical Technology Liability Other
Specialty P&C Segment
New business
$ 6.1 $ 0.3 $ — $ 6.4 $ 7.0 $ 1.2 $ 0.1 $ 8.3
Retention rate(1)
85 % 86 % 58 % 84 % 84 % 90 % 67 % 84 %
Change in renewal pricing(2)
8 % 4 % 3 % 8 % 14 % (1 %) 5 % 13 %
Nine Months Ended September 30
2025 2024
($ in millions)
MPL Medical Technology Liability Other
Specialty P&C Segment
MPL Medical Technology Liability Other
Specialty P&C Segment
New business $ 22.7 $ 1.3 $ 0.1 $ 24.1 $ 20.5 $ 2.8 $ 0.4 $ 23.7
Retention rate(1)
84 % 86 % 58 % 84 % 85 % 91 % 76 % 85 %
Change in renewal pricing(2)
9 % 2 % 3 % 9 % 11 % 1 % 3 % 10 %
(1) Calculated as annualized renewed premium divided by all annualized premium subject to renewal. Retention is affected by a number of factors. We may lose insureds to competitors or to alternative insurance mechanisms such as risk retention groups, captive arrangements or self-insurance entities (often when physicians join hospitals or large group practices) or due to pricing or other issues. We may choose not to renew an insured as a result of our underwriting evaluation. Insureds may also terminate coverage because they have left the practice of medicine for various reasons, principally for retirement, death or disability, but also for personal reasons. See further explanation of changes in retention above under the heading "Gross Premiums Written".
(2) We are committed to a rate structure that will allow us to fulfill our obligations to our insureds while generating competitive long-term returns for our shareholders. Our pricing continues to be based on expected losses as indicated by our historical loss data and available industry loss data. In recent years, this practice has resulted in rate increases and we anticipate further rate increases due to indications of increasing projected loss severity. Additionally, the pricing of our business includes the effects of filed rates, surcharges and discounts. Renewal pricing reflects changes in our exposure base, deductibles, self-insurance retention limits and other policy terms and conditions. See further explanation of changes in renewal pricing above under the heading "Gross Premiums Written".
Ceded Premiums Ratio
Ceded premiums represent the amounts owed to our reinsurers for their assumption of a portion of our losses. See previous discussion in our Liquidity and Capital Resources and Financial Condition section under the heading "Reinsurance" for information regarding our Medical Professional Liability and Medical Technology Liability excess of loss reinsurance arrangements.
We pay our reinsurers a ceding premium in exchange for their accepting the risk, and in certain of our excess of loss arrangements, the ultimate amount of which is determined by the loss experience of the business ceded, subject to certain minimum and maximum amounts. Given the length of time that it takes to resolve our claims, many years may elapse before all losses recoverable under a reinsurance arrangement are known. As a part of the process of estimating our loss reserve we also make estimates regarding the amounts recoverable under our reinsurance arrangements. As a result, we may have an adjustment to our estimate of expected losses and associated recoveries for prior year ceded losses under certain loss sensitive reinsurance agreements. During the 2025 nine-month period, we decreased our estimate of ceded premiums owed related to prior accident years by $1.2 million. There were no adjustments to our previous estimates of ceded premiums owed related to prior accident years during the 2025 three-month period or 2024 three- and nine-month periods. Changes to estimates of premiums ceded related to prior accident years are fully earned in the period the changes in estimates occur.
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As shown in the table below, our ceded premiums ratio was affected during the 2025 nine-month period by a revision to our estimate of premiums owed to reinsurers related to coverages provided in prior accident years. The ceded premiums ratio was as follows:
Three Months Ended September 30 Nine Months Ended September 30
2025 2024 Change 2025 2024 Change
Ceded premiums ratio 10.4 % 9.2 % 1.2 pts 9.5 % 8.8 % 0.7 pts
Less the effect of adjustments in premiums owed under reinsurance agreements, prior accident years (as previously discussed) — % — % — pts (0.2 %) — % (0.2 pts)
Ratio, current accident year 10.4 % 9.2 % 1.2 pts 9.7 % 8.8 % 0.9 pts
The above table reflects ceded premiums written, excluding the effect of prior year ceded premium adjustments, as previously discussed, as a percentage of gross premiums written. The increase in our current accident year ceded premiums ratios for the 2025 three- and nine-month periods as compared to the same respective periods of 2024 was driven by the impact of the aforementioned 100% quota share reinsurance agreement entered into during the second quarter of 2025 related to our legal professional liability policies. The increase in our current accident year ceded premiums ratios for the 2025 three- and nine-month periods also reflected an increase in premiums ceded under our excess of loss reinsurance arrangements primarily due to the incorporation of podiatric and chiropractic policies into our MPL treaty effective October 1, 2024 and, to a lesser extent, the impact of a higher rate than the previous Medical Technology Liability treaty.
Net Premiums Earned
Net premiums earned consist of gross premiums earned less the portion of earned premiums that we cede to our reinsurers for their assumption of a portion of our losses. Because premiums are generally earned pro rata over the entire policy period, fluctuations in premiums earned tend to lag those of premiums written. The majority of our policies carry a term of one year; however, some of our Medical Technology Liability policies have a multi-year term. Tail coverage premiums are generally 100% earned in the period written because the policies insure only incidents that occurred in prior periods and are not cancellable. Retroactive coverage premiums are 100% earned at the inception of the contract, as all of the associated underlying loss events occurred in the past. Additionally, any ceded premium changes due to changes to estimates of premiums owed under reinsurance agreements for prior accident years are fully earned in the period of change.
Net premiums earned were as follows:
Three Months Ended September 30 Nine Months Ended September 30
($ in thousands) 2025 2024 Change 2025 2024 Change
Gross premiums earned $ 198,394 $ 205,908 $ (7,514) (3.6 %) $ 594,492 $ 614,229 $ (19,737) (3.2 %)
Less: Ceded premiums earned 17,607 17,204 403 2.3 % 51,141 52,092 (951) (1.8 %)
Net premiums earned $ 180,787 $ 188,704 $ (7,917) (4.2 %) $ 543,351 $ 562,137 $ (18,786) (3.3 %)
Gross premiums earned decreased during the 2025 three- and nine-month periods as compared to the same respective periods of 2024 driven by our ceased participation in Syndicate 1729 for the 2024 underwriting year and, to a lesser extent, the pro rata effect of a decrease in the volume of written premium during the preceding twelve months, primarily due to proactive actions taken in certain lines to improve profitability.
Ceded premiums earned during the 2025 nine-month period included a prior accident year ceded premium adjustment of $1.2 million (see previous discussion under the heading "Ceded Premiums Ratio"). After removing the effect of the prior accident year ceded premium adjustment, ceded premiums earned increased by $0.4 million and $0.2 million during the 2025 three- and nine-month periods, respectively, primarily attributable to the aforementioned 100% quota share reinsurance agreement related to our legal professional liability policies and, for the 2025 nine-month period, an increase in premium ceded under our excess of loss arrangements.
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Losses and Loss Adjustment Expenses
The determination of calendar year losses involves the actuarial evaluation of incurred losses for the current accident year and the actuarial re-evaluation of incurred losses for prior accident years.
Accident year refers to the accounting period in which the insured event becomes a liability of the insurer. For claims-made policies, which represent the majority of the premiums written in our Specialty P&C segment, the insured event generally becomes a liability when the event is first reported to us and the policy that is in effect at that time covers the claim. For occurrence policies, the insured event becomes a liability when the event takes place even though the claim may be reported to us at a later date. For retroactive coverages, the insured event becomes a liability at inception of the underlying contract. We believe that measuring losses on an accident year basis is the best measure of the underlying profitability of the premiums earned in that period, since it associates policy premiums earned with the estimate of the losses incurred related to those policy premiums.
The following table summarizes calendar year net loss ratios for our Specialty P&C segment by separating losses between the current accident year and all prior accident years. The net loss ratios for our Specialty P&C segment were as follows:
Net Loss Ratios (1)
Three Months Ended September 30 Nine Months Ended September 30
2025 2024 Change 2025 2024 Change
Calendar year net loss ratio 82.6 % 72.2 % 10.4 pts 78.3 % 77.3 % 1.0 pts
Less impact of prior accident years on the net loss ratio (0.6 %) (10.5 %) 9.9 pts (4.4 %) (4.8 %) 0.4 pts
Current accident year net loss ratio
83.2 % 82.7 % 0.5 pts 82.7 % 82.1 % 0.6 pts
Less estimated ratio increase (decrease) attributable to:
Ceded premium adjustments, prior accident years (2)
— % — % — pts (0.2 %) — % (0.2 pts)
Current accident year net loss ratio, excluding the effect of prior year ceded premium (3)
83.2 % 82.7 % 0.5 pts 82.9 % 82.1 % 0.8 pts
(1)Net losses, as specified, divided by net premiums earned.
(2)In the second quarter of 2025, we decreased our estimate of premiums owed under a reinsurance treaty related to prior accident years which increased net premiums earned (the denominator of the loss ratio). See previous discussion under the heading "Ceded Premiums Ratio".
(3)As shown in the table above, our current accident year net loss ratio, excluding the effect of prior year ceded premium adjustments, increased 0.5 and 0.8 percentage points for the three and nine months ended September 30, 2025, respectively, as compared to the same respective periods of 2024 due to premium adjustments related to loss sensitive policies, changes in the mix of business and, for the nine months ended September 30, 2025, losses incurred from our Lloyd's Syndicates operations, which is currently in run-off.
We re-evaluate our previously established reserve each quarter based upon the most recently completed actuarial analysis supplemented by any new analysis, information or trends that have emerged since the date of that study. We also take into account currently available industry trend information. Our internal actuaries perform an in-depth review of our reserve for losses on at least a semi-annual basis using the loss and exposure data of our insurance subsidiaries.
We recognized net favorable (unfavorable) prior accident year reserve development as follows:
Three Months Ended September 30 Nine Months Ended September 30
($ in thousands) 2025 2024 Change 2025 2024 Change
Total net favorable (unfavorable) reserve development $ 984 $ 19,732 $ (18,748) (95.0 %) $ 23,821 $ 27,163 $ (3,342) (12.3 %)
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The following table shows net favorable (unfavorable) development by component for the three and nine months ended September 30, 2025 and 2024:
•MPL: Net favorable reserve development recognized during the three and nine months ended September 30, 2025 was primarily due to lower than anticipated loss emergence principally related to accident years 2018 through 2022. Net favorable reserve development during the three and nine months ended September 30, 2024 reflected overall favorable trends in claim closing patterns relative to expectations, principally related to accident years 2018 and prior in our legacy book and, for the 2024 three-month period, the 2021 accident year in our NORCAL book.
•Medical Technology Liability: Net favorable reserve development recognized during the nine months ended September 30, 2025 was driven by lower than anticipated loss emergence principally related to accident years 2022 and 2023. Net favorable reserve development during the three and nine months ended September 30, 2024 principally related to accident years 2019 through 2023.
•Lloyd's Syndicates Operations (Participation Discontinued): Net unfavorable reserve development associated with our discontinued Lloyd's Syndicates operations during the three and nine months ended September 30, 2025 was driven by higher than expected losses and development on certain large claims, primarily aviation related losses. Net favorable reserve development associated with our discontinued Lloyd's Syndicates operations during the three months ended September 30, 2024 was driven by lower than expected losses and development on certain large claims. Net unfavorable reserve development during the nine months ended September 30, 2024 was driven by higher than expected losses and development on certain large claims, primarily catastrophe related losses.
•Purchase Accounting Amortization: Net prior year reserve development for all periods presented included amortization of the purchase accounting fair value adjustment on NORCAL's assumed net reserve and amortization of the negative VOBA associated with NORCAL's DDR reserve which is recorded as a reduction to net losses and loss adjustment expenses.
A detailed discussion of factors influencing our recognition of loss development is included in our Critical Accounting Estimates section under the heading "Reserve for Losses and Loss Adjustment Expenses" in our December 31, 2024 report on Form 10-K. Assumptions used in establishing our reserve are regularly reviewed and updated by management as new data becomes available. Any adjustments necessary are reflected in current operations. Due to the size of our reserve, even a small percentage adjustment to the assumptions can have a material effect on our results of operations for the period in which the change is made.
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Underwriting, Policy Acquisition and Operating Expenses
Our Specialty P&C segment underwriting, policy acquisition and operating expenses were comprised as follows:
Three Months Ended September 30 Nine Months Ended September 30
($ in thousands) 2025 2024 Change 2025 2024 Change
DPAC amortization $ 26,839 $ 25,238 $ 1,601 6.3 % $ 73,753 $ 76,839 $ (3,086) (4.0 %)
Management fees 1,102 1,169 (67) (5.7 %) 2,978 3,095 (117) (3.8 %)
Other underwriting and operating expenses 22,980 25,447 (2,467) (9.7 %) 69,833 74,213 (4,380) (5.9 %)
Total $ 50,921 $ 51,854 $ (933) (1.8 %) $ 146,564 $ 154,147 $ (7,583) (4.9 %)
DPAC amortization for the 2025 three-month period reflected the impact of a one-time cumulative adjustment to 2025 amortization costs of $2.2 million. Excluding this one-time adjustment, DPAC amortization for the 2025 three- and nine-month periods decreased as compared to the same respective periods of 2024 primarily driven by a decrease in agent commissions and brokerage expenses, largely due to lower commissionable premium.
Management fees are charged pursuant to a management agreement by the Corporate segment to the core domestic insurance subsidiaries within our Specialty P&C segment for services provided based on the extent to which services are provided to the subsidiary and the amount of premium written by the subsidiary. While the terms of the management agreement were consistent between 2025 and 2024, fluctuations in the amount of premium written by each subsidiary can result in corresponding variations in the management fee charged to each subsidiary during a particular period.
Other underwriting and operating expenses decreased for the 2025 three- and nine-month periods as compared to the same respective periods of 2024 primarily attributable to lower compensation-related expenses, professional fees, facilities expense and, for the 2025 nine-month period, a decrease in our share of Syndicate 1729's operating expenses due to our ceased participation for the 2024 underwriting year. The decrease in compensation-related expenses for the 2025 three- and nine-month periods primarily reflected higher amounts accrued for performance-related incentive plans during the prior year periods due to higher achievement of the related performance metrics and a decrease in employee headcount. The decrease in professional fees for the 2025 three- and nine-month periods was driven by a reduction in fees associated with a data analytics services agreement. The decrease in facilities expense for the 2025 three- and nine-month periods was due to the sale of our Franklin, TN property during the first quarter of 2025. The remaining variance in other underwriting and operating expenses for the 2025 three- and nine-month periods as compared to the same respective periods of 2024 was comprised of individually insignificant components.
Underwriting Expense Ratio (the Expense Ratio)
Our expense ratio for the Specialty P&C segment was as follows:
Three Months Ended September 30 Nine Months Ended September 30
2025 2024 Change 2025 2024 Change
Underwriting expense ratio
28.2 % 27.5 % 0.7 pts 27.0 % 27.4 % (0.4 pts)
The change in our expense ratios for the 2025 three- and nine-month periods as compared to the same respective periods of 2024 was primarily attributable to the following:
Increase (Decrease)
2025 versus 2024
(In percentage points) Comparative three-month periods
Comparative nine-month periods
Estimated ratio increase (decrease) attributable to:
Change in net premiums earned and DPAC amortization(1)
1.8 pts 0.2 pts
Tail premium(2)
(0.4 pts) (0.4 pts)
All other, net (0.7 pts) (0.2 pts)
Increase (decrease) in the underwriting expense ratio
0.7 pts (0.4 pts)
(1) Excludes tail premium and, for the 2025 nine-month period, the impact of a ceded premium adjustment related to prior accident years. See previous discussion on the ceded premium adjustment under the heading "Ceded Premiums Ratio."
(2) Represents the impact of the tail premium written in the period as these premiums are typically fully earned when written with minimal associated expenses.
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Excluding the impact of the items specifically identified in the table above, our expense ratio for the 2025 three- and nine-month periods decreased by 0.7 and 0.2 percentage points, respectively, as compared to the same respective periods of 2024 driven by lower compensation-related costs, professional fees and facilities expense.
As shown in the previous table, our underwriting expense ratio for the 2025 three-month period was also impacted by a one-time cumulative adjustment to 2025 DPAC amortization, as previously discussed, which was the driver of the 1.8 percentage point increase to the expense ratio.
Segment Results - Workers' Compensation Insurance
Our Workers' Compensation Insurance segment includes workers' compensation products provided to employers generally with 1,000 or fewer employees, as discussed in Note 16 of the Notes to Consolidated Financial Statements in our December 31, 2024 report on Form 10-K. Segment results included the following:
Three Months Ended September 30 Nine Months Ended September 30
($ in thousands) 2025 2024 Change 2025 2024 Change
Net premiums written $ 43,396 $ 46,318 $ (2,922) (6.3 %) $ 136,371 $ 136,664 $ (293) (0.2 %)
Net premiums earned $ 40,972 $ 41,829 $ (857) (2.0 %) $ 124,038 $ 124,692 $ (654) (0.5 %)
Other income 414 537 (123) (22.9 %) 1,237 1,483 (246) (16.6 %)
Net losses and loss adjustment expenses (30,727) (32,193) 1,466 (4.6 %) (92,027) (95,980) 3,953 (4.1 %)
Underwriting, policy acquisition and operating expenses (15,794) (14,383) (1,411) 9.8 % (48,184) (44,008) (4,176) 9.5 %
Segment results $ (5,135) $ (4,210) $ (925) (22.0 %) $ (14,936) $ (13,813) $ (1,123) (8.1 %)
Net loss ratio 75.0% 77.0% (2.0 pts) 74.2% 77.0% (2.8 pts)
Underwriting expense ratio 38.5% 34.4% 4.1 pts 38.8% 35.3% 3.5 pts
Premiums Written
Our workers’ compensation premium volume is driven by five primary factors: (1) the amount of new business written, (2) retention of our existing book of business, (3) premium rates charged on our renewal book of business, (4) changes in payroll exposure and (5) audit premium.
Gross, ceded and net premiums written were as follows:
Three Months Ended September 30 Nine Months Ended September 30
($ in thousands) 2025 2024 Change 2025 2024 Change
Gross premiums written
$ 60,933 $ 63,933 $ (3,000) (4.7 %) $ 190,060 $ 197,292 $ (7,232) (3.7 %)
Less: Ceded premiums written
17,537 17,615 (78) (0.4 %) 53,689 60,628 (6,939) (11.4 %)
Net premiums written
$ 43,396 $ 46,318 $ (2,922) (6.3 %) $ 136,371 $ 136,664 $ (293) (0.2 %)
Gross Premiums Written
Gross premiums written by product were as follows:
Three Months Ended September 30 Nine Months Ended September 30
($ in thousands) 2025 2024 Change 2025 2024 Change
Traditional business:
Direct
$ 45,825 $ 48,532 $ (2,707) (5.6 %) $ 141,295 $ 142,401 $ (1,106) (0.8 %)
Other 1,868 1,591 277 17.4 % 5,449 4,740 709 15.0 %
Change in EBUB estimate (500) 500 (1,000) (200.0 %) (500) 1,150 (1,650) (143.5 %)
Total traditional business (1)
47,193 50,623 (3,430) (6.8 %) 146,244 148,291 (2,047) (1.4 %)
Alternative market business(2)
13,740 13,310 430 3.2 % 43,816 49,001 (5,185) (10.6 %)
Total $ 60,933 $ 63,933 $ (3,000) (4.7 %) $ 190,060 $ 197,292 $ (7,232) (3.7 %)
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(1) Traditional gross premiums written decreased for the 2025 three- and nine-month periods driven by retention losses and changes in the carried EBUB estimate, partially offset by audit premium and new business. Renewal business reflected premium retention of 80% and 85%, and rate increases of 0.3% and rate decreases of 0.7% for the 2025 three- and nine-month periods, respectively. Rate decreases were more than offset by an increase in payroll exposure. Retention losses for the 2025 three-month period primarily reflect the non-renewal of two large accounts that did not meet our profitability metrics, which resulted in a decrease in our retention rate of 4.9 percentage points. Renewal premium reflected premium related to policies that renewed as traditional business that were previously written as alternative market policies totaling $0.5 million and $2.8 million for the 2025 three- and nine-month periods, respectively. Renewal and new business results continue to reflect the competitive workers' compensation market conditions, including the impact of compounded state loss cost reductions in our core operating territories.
(2) A majority of alternative market premiums are ceded to SPCs in our Segregated Portfolio Cell Reinsurance segment. See further discussion on alternative market gross premiums written in our Segment Results - Segregated Portfolio Cell Reinsurance section under the heading "Gross Premiums Written" that follows. We retained thirteen of the sixteen (two of three in the third quarter) workers’ compensation alternative market programs that were up for renewal during the nine months ended September 30, 2025. Three agency-owned programs were non-renewed and placed in run-off during the first nine months of 2025, two effective January 1, 2025 and one effective September 1, 2025.
New business, audit premium, renewal retention and renewal price changes for our traditional business and the alternative market business are shown in the table below:
Three Months Ended September 30
2025 2024
($ in millions) Traditional Business
Alternative Market Business (3)
Segment
Results Traditional Business
Alternative Market Business (3)
Segment
Results
New business $ 4.5 $ 1.1 $ 5.6 $ 2.6 $ 0.7 $ 3.3
Audit premium (excluding EBUB) $ 3.7 $ 1.4 $ 5.1 $ 3.7 $ 0.7 $ 4.4
Retention rate (1)
80 % 94 % 83 % 89 % 89 % 89 %
Change in renewal pricing (2)
— % (3 %) (1 %) 2 % (2 %) 1 %
Nine Months Ended September 30
2025 2024
($ in millions) Traditional Business
Alternative Market Business (3)
Segment
Results Traditional Business
Alternative Market Business (3)
Segment
Results
New business $ 12.7 $ 2.9 $ 15.6 $ 14.5 $ 2.8 $ 17.3
Audit premium (excluding EBUB) $ 8.2 $ 3.2 $ 11.4 $ 9.0 $ 3.1 $ 12.1
Retention rate (1)
85 % 89 % 86 % 88 % 84 % 87 %
Change in renewal pricing (2)
(1 %) (2 %) (1 %) (2 %) (1 %) (2 %)
(1) We calculate our workers' compensation retention as renewed premium divided by premium available to renew. Beginning in the fourth quarter of 2024, we revised our calculation of retention to remove the impacts of audit premium. Previously, premium available to renew in the calculation included premium adjustments related to audits of expired policies which impacted retention. The prior period has been recast to conform to the current period calculation. Our retention rate can be impacted by various factors, including price or other competitive issues, insureds being acquired, or a decision not to renew based on our underwriting evaluation.
(2) The pricing of our business includes an assessment of the underlying policy exposure and market conditions. We continue to base our pricing on expected losses, as indicated by our historical loss data.
(3) Represents alternative market business ceded to SPCs in our Segregated Portfolio Cell Reinsurance segment.
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Ceded Premiums Written
Ceded premiums written were as follows:
Three Months Ended September 30 Nine Months Ended September 30
($ in thousands) 2025 2024 Change 2025 2024 Change
Premiums ceded to SPCs(1)
$ 13,593 $ 13,156 $ 437 3.3 % $ 37,356 $ 42,993 $ (5,637) (13.1 %)
Premiums ceded to external reinsurers(2)
3,797 4,305 (508) (11.8 %) 9,873 11,627 (1,754) (15.1 %)
Other(3)
147 154 (7) (4.5 %) 6,460 6,008 452 7.5 %
Total ceded premiums written $ 17,537 $ 17,615 $ (78) (0.4 %) $ 53,689 $ 60,628 $ (6,939) (11.4 %)
(1) Represents alternative market business that is ceded under 100% quota share reinsurance agreements to the SPCs in our Segregated Portfolio Cell Reinsurance segment. See further discussion on alternative market gross premiums written in our Segment Results - Segregated Portfolio Cell Reinsurance section under the heading "Gross Premiums Written" that follows.
(2) Premiums ceded under our traditional reinsurance treaty are based on premiums earned during the treaty period. The decrease for the 2025 three- and nine-month periods primarily reflects a lower average reinsurance rate that took effect with the May 1, 2025 treaty renewal. The decrease for the 2025 three- and nine-month periods also reflects a $0.2 million and $1.6 million reduction in reinstatement premium, respectively, compared to an increase in reinstatement premium in the 2024 nine-month period totaling $0.7 million. The 2025 reinstatement premium reduction related to a large 2021 accident year claim reserve decrease.
(3) This component of ceded premiums written primarily represents alternative market business ceded to unaffiliated captive insurers for two programs under 100% quota share reinsurance agreements.

Ceded Premiums Ratio
The ceded premiums ratio was as follows:
Three Months Ended September 30 Nine Months Ended September 30
2025 2024 Change 2025 2024 Change
Ceded premiums ratio, as reported 30.9 % 32.3 % (1.4 pts) 30.0 % 32.8 % (2.8 pts)
Less the effect of:
Premiums ceded to SPCs (100%)
19.2 % 19.9 % (0.7 pts) 19.3 % 21.4 % (2.1 pts)
Other 3.1 % 2.7 % 0.4 pts 3.0 % 2.4 % 0.6 pts
Ceded premiums ratio (related to external reinsurance), less the effects of above 8.6 % 9.7 % (1.1 pts) 7.7 % 9.0 % (1.3 pts)
The above table reflects traditional ceded premiums earned as a percentage of traditional gross premiums earned. As discussed above, premiums ceded under our traditional reinsurance treaty are based on premiums earned during the treaty period. The ceded premiums ratio decreased for the 2025 three- and nine-month periods as compared to the same respective periods of 2024, which reflected a lower average reinsurance rate that took effect with the May 1, 2025 treaty renewal. For the 2025 nine-month period, the lower ceded premiums ratio primarily reflected the $1.6 million reduction in reinstatement premium as compared to an increase of $0.7 million in the same period of 2024, as previously discussed.
Net Premiums Earned
Net premiums earned consist of gross premiums earned less the portion of earned premiums that we cede to SPCs in our Segregated Portfolio Cell Reinsurance segment, external reinsurers and the unaffiliated captive insurers. Because premiums are generally earned pro rata over the entire policy period, fluctuations in premiums earned tend to lag those of premiums written. Our workers’ compensation policies are twelve month term policies, and premiums are earned on a pro rata basis over the policy period. Net premiums earned also include premium adjustments related to the audit of our insureds' payrolls, changes in our estimates related to EBUB and premium adjustments related to retrospectively-rated policies. Payroll audits are conducted subsequent to the end of the policy period and any related premium adjustments are recorded as fully earned in the current period. We evaluate our estimates related to EBUB and retrospectively-rated premium adjustments on a quarterly basis with any adjustments being included in written and earned premium in the current period.
Net premiums earned were as follows:
Three Months Ended September 30 Nine Months Ended September 30
($ in thousands) 2025 2024 Change 2025 2024 Change
Gross premiums earned $ 59,261 $ 61,822 $ (2,561) (4.1 %) $ 177,103 $ 185,440 $ (8,337) (4.5 %)
Less: Ceded premiums earned 18,289 19,993 (1,704) (8.5 %) 53,065 60,748 (7,683) (12.6 %)
Net premiums earned $ 40,972 $ 41,829 $ (857) (2.0 %) $ 124,038 $ 124,692 $ (654) (0.5 %)
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Net premiums earned decreased for the 2025 three- and nine-month periods as compared to the same respective periods of 2024, reflecting lower audit premium, changes in the carried EBUB estimate and the pro rata effect of a decrease in the volume of written premium during the preceding twelve months. Partially offsetting these factors for the 2025 nine-month period is the impact of the $1.6 million reduction in reinstatement premium as compared to an increase of $0.7 million in the same period of 2024, as previously discussed.
Losses and Loss Adjustment Expenses
We estimate our current accident year loss and loss adjustment expenses by developing actual reported losses using historical loss development factors, adjusted to reflect current and expected trends based on various internal analyses and supplemental information. The following table summarizes calendar year net loss ratios by separating losses between the current accident year and all prior accident years. Calendar year and current accident year net loss ratios by component were as follows:
Three Months Ended September 30 Nine Months Ended September 30
2025 2024 Change 2025 2024 Change
Calendar year net loss ratio 75.0 % 77.0 % (2.0 pts) 74.2 % 77.0 % (2.8 pts)
Less impact of prior accident years on the net loss ratio — % — % — pts (0.8 %) — % (0.8 pts)
Current accident year net loss ratio 75.0 % 77.0 % (2.0 pts) 75.0 % 77.0 % (2.0 pts)
The current accident year net loss ratio of 75.0% for the 2025 three- and nine-month periods improved 2.0 percentage points as compared to the 2024 three- and nine-month periods and full year current accident year net loss ratio of 77.0%. While we continue to consider the impact of medical cost inflation on our loss results, we expect our 2025 medical loss trends to be favorably impacted by cost control initiatives that were implemented during the first quarter of 2025.
We recognized $1.0 million of net favorable prior accident year reserve development during the nine months ended September 30, 2025, reflecting a large claim reserve reduction from the 2021 accident year, which had previously exceeded the per person maximum limit under our reinsurance contract. We did not recognize any prior accident year reserve development during the three months ended September 30, 2025 or three and nine months ended September 30, 2024.
Underwriting, Policy Acquisition and Operating Expenses
Underwriting, policy acquisition and operating expenses include the amortization of commissions, premium taxes and underwriting salaries, which are capitalized and deferred over the related workers’ compensation policy period, net of ceding commissions earned. The capitalization of underwriting salaries can vary as they are subject to the success rate of our contract acquisition efforts. These expenses also include a management fee charged by our Corporate segment, which represents intercompany charges pursuant to a management agreement. The management fee is based on the extent to which services are provided to the subsidiary and the amount of premium written by the subsidiary.
Our Workers' Compensation Insurance segment underwriting, policy acquisition and operating expenses were comprised as follows:
Three Months Ended September 30 Nine Months Ended September 30
($ in thousands) 2025 2024 Change 2025 2024 Change
DPAC amortization(1)
$ 7,224 $ 6,692 $ 532 7.9 % $ 23,536 $ 21,495 $ 2,041 9.5 %
Management fees 462 480 (18) (3.8 %) 1,430 1,479 (49) (3.3 %)
Other underwriting and operating expenses(2)
11,019 10,440 579 5.5 % 31,882 31,108 774 2.5 %
SPC ceding commission offset(3)
(2,911) (3,229) 318 (9.8 %) (8,664) (10,074) 1,410 (14.0 %)
Total $ 15,794 $ 14,383 $ 1,411 9.8 % $ 48,184 $ 44,008 $ 4,176 9.5 %
(1) DPAC amortization was higher for the three and nine months ended September 30, 2025 as compared to the same respective periods of 2024, reflecting the prior year impact of a refund from a guaranty fund assessment totaling $0.9 million in the third quarter of 2024 and, for the 2025 nine-month period, an increase in state employer assessment liabilities in the second quarter of 2025 totaling $1.0 million. The increase in the liability reflected our expectation of assessments in excess of the amounts charged and collected from policyholders as determined and promulgated by states in which we operate.
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(2) The change in other underwriting and operating expenses for the three and nine months ended September 30, 2025 as compared to the same respective periods of 2024 was comprised of individually insignificant components.
(3) As previously discussed, alternative market premiums written by our Workers' Compensation Insurance segment are 100% ceded, less a ceding commission, to either the SPCs in our Segregated Portfolio Cell Reinsurance segment or unaffiliated captive insurers. The ceding commission charged to the SPCs consists of an amount for fronting fees, cell rental fees, commissions, premium taxes, claims administration fees and risk management fees. The fronting fees, commissions, premium taxes and risk management fees are recorded as an offset to underwriting, policy acquisition and operating expenses. Cell rental fees are recorded as a component of other income and claims administration fees are recorded as ceded ULAE. SPC ceding commissions earned decreased for the three and nine months ended September 30, 2025 as compared to the same respective periods of 2024, reflecting the reduction in alternative market written premium.
Underwriting Expense Ratio (the Expense Ratio)
The underwriting expense ratio included the impact of the following:
Three Months Ended September 30 Nine Months Ended September 30
2025 2024 Change 2025 2024 Change
Underwriting expense ratio, as reported 38.5 % 34.4 % 4.1 pts 38.8 % 35.3 % 3.5 pts
Less estimated ratio increase (decrease) attributable to:
Impact of ceding commissions received from SPCs
4.7 % 4.1 % 0.6 pts 1.6 % 1.1 % 0.5 pts
Impact of audit premium (2.0 %) (2.3 %) 0.3 pts (1.9 %) (2.3 %) 0.4 pts
Impact of change in EBUB estimate 0.3 % (0.3 %) 0.6 pts 0.1 % (0.3 %) 0.4 pts
Underwriting expense ratio, less listed effects 35.5 % 32.9 % 2.6 pts 39.0 % 36.8 % 2.2 pts
Excluding the items noted in the table above, the expense ratios increased for the three and nine months ended September 30, 2025 primarily reflecting the prior year impact of a recovery of a guaranty fund assessment, an increase in acquisition-related expenses and, for the 2025 nine-month period, the impact of the state employer assessment adjustment, as discussed above.
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Segment Results - Segregated Portfolio Cell Reinsurance
The Segregated Portfolio Cell Reinsurance segment includes the results (underwriting profit or loss, plus investment results, net of U.S. federal income taxes) of SPCs at Inova Re and Eastern Re, our Cayman Islands SPC operations, as discussed in Note 16 of the Notes to Consolidated Financial Statements in our December 31, 2024 report on Form 10-K. SPCs are segregated pools of assets and liabilities that provide an insurance facility for a defined set of risks. Assets of each SPC are solely for the benefit of that individual cell and each SPC is solely responsible for the liabilities of that individual cell. Assets of one SPC are statutorily protected from the creditors of the others. As of September 30, 2025, there were twenty-seven (ten inactive) SPCs.
Segment results reflect our share of the underwriting and investment results of the SPCs in which we participate and included the following:
Three Months Ended September 30 Nine Months Ended September 30
($ in thousands) 2025 2024 Change 2025 2024 Change
Net premiums written $ 12,327 $ 11,738 $ 589 5.0 % $ 34,450 $ 39,257 $ (4,807) (12.2 %)
Net premiums earned $ 11,645 $ 12,627 $ (982) (7.8 %) $ 34,697 $ 40,347 $ (5,650) (14.0 %)
Net investment income 1,100 1,009 91 9.0 % 2,818 2,687 131 4.9 %
Net investment gains (losses) 796 599 197 32.9 % 1,779 2,327 (548) (23.5 %)
Other income (expenses)
1 1 — — % 18 1 17 1,700.0 %
Net losses and loss adjustment expenses (6,129) (7,801) 1,672 (21.4 %) (18,732) (26,481) 7,749 (29.3 %)
Underwriting, policy acquisition and operating expenses (4,157) (4,143) (14) 0.3 % (12,239) (14,105) 1,866 (13.2 %)
SPC U.S. federal income tax (expense) benefit (1)
(658) (377) (281) 74.5 % (1,913) (1,043) (870) 83.4 %
SPC net results 2,598 1,915 683 35.7 % 6,428 3,733 2,695 72.2 %
SPC dividend (expense) income (2)
(1,674) (1,360) 314 23.1 % (3,762) (2,479) 1,283 51.8 %
Segment results (3)
$ 924 $ 555 $ 369 66.5 % $ 2,666 $ 1,254 $ 1,412 112.6 %
Net loss ratio 52.6% 61.8% (9.2 pts) 54.0% 65.6% (11.6 pts)
Underwriting expense ratio 35.7% 32.8% 2.9 pts 35.3% 35.0% 0.3 pts
(1) 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.
(2) Represents the net (profit) loss attributable to external cell participants.
(3) Represents our share of the net profit (loss) and OCI of the SPCs in which we participate.
Premiums Written
Premiums in our Segregated Portfolio Cell Reinsurance segment are assumed from either our Workers' Compensation Insurance or Specialty P&C segments. Premium volume is driven by five primary factors: (1) the amount of new business written, (2) retention of the existing book of business, (3) premium rates charged on the renewal book of business and, for workers' compensation business, (4) changes in payroll exposure and (5) audit premium.
Gross, ceded and net premiums written were as follows:
Three Months Ended September 30 Nine Months Ended September 30
($ in thousands) 2025 2024 Change 2025 2024 Change
Gross premiums written
$ 14,225 $ 13,650 $ 575 4.2 % $ 40,001 $ 45,467 $ (5,466) (12.0 %)
Less: Ceded premiums written
1,898 1,912 (14) (0.7 %) 5,551 6,210 (659) (10.6 %)
Net premiums written
$ 12,327 $ 11,738 $ 589 5.0 % $ 34,450 $ 39,257 $ (4,807) (12.2 %)
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Gross Premiums Written
Gross premiums written reflected reinsurance premiums assumed by component as follows:
Three Months Ended September 30 Nine Months Ended September 30
($ in thousands) 2025 2024 Change 2025 2024 Change
Workers' compensation
$ 13,593 $ 13,156 $ 437 3.3 % $ 37,356 $ 42,993 $ (5,637) (13.1 %)
Medical professional liability
632 494 138 27.9 % 2,645 2,474 171 6.9 %
Gross Premiums Written $ 14,225 $ 13,650 $ 575 4.2 % $ 40,001 $ 45,467 $ (5,466) (12.0 %)
Gross premiums written for the three and nine months ended September 30, 2025 and 2024 were primarily comprised of workers' compensation coverages assumed from our Workers' Compensation Insurance segment. Workers' compensation gross premiums written remained relatively unchanged for the 2025 three-month period and decreased during the 2025 nine-month period as compared to the same respective periods of 2024. The decrease during the 2025 nine-month period primarily reflected the impact of the non-renewal of two agency-owned programs with annual premium of $6.2 million which were placed in run-off effective January 1, 2025. We non-renewed an additional agency-owned program with annual premium of $2.1 million during the third quarter of 2025. Policies expiring in these programs during 2025 will be considered for renewal in other alternative market programs or as traditional business in our Workers' Compensation Insurance segment.
We retained eleven of the fourteen workers' compensation programs (two in the third quarter 2025) and one medical professional liability program up for renewal during the nine months ended September 30, 2025.
Ceded Premiums Ratio
The ceded premiums ratio was as follows:
Three Months Ended September 30 Nine Months Ended September 30
2025 2024 Change 2025 2024 Change
Ceded premiums ratio 14.0% 14.5% (0.5 pts) 14.9% 14.4% 0.5 pts
For the workers' compensation business, each SPC has in place its own external reinsurance coverage. The medical professional liability business is assumed net of reinsurance from our Specialty P&C segment; therefore, there are no ceded premiums related to the medical professional liability business reflected in the table above. Workers' compensation premiums ceded under our SPC reinsurance treaty are based on premiums written during the program year that renews during the treaty period. The above table reflects ceded premiums as a percentage of gross premiums written. The ceded premiums ratio reflects the weighted average reinsurance rates of all SPC programs.
Net Premiums Earned
Net premiums earned consist of gross premiums earned less the portion of earned premiums that the SPCs cede to external reinsurers. Because premiums are generally earned pro rata over the entire policy period, fluctuations in premiums earned tend to lag those of premiums written. Policies ceded to the SPCs are twelve month term policies and premiums are earned on a pro rata basis over the policy period. Net premiums earned also include premium adjustments related to the audit of workers' compensation insureds' payrolls. Payroll audits are conducted subsequent to the end of the policy period and any related adjustments are recorded as fully earned in the current period.
Gross, ceded and net premiums earned were as follows:
Three Months Ended September 30 Nine Months Ended September 30
($ in thousands) 2025 2024 Change 2025 2024 Change
Gross premiums earned $ 13,516 $ 14,613 $ (1,097) (7.5 %) $ 40,342 $ 46,648 $ (6,306) (13.5 %)
Less: Ceded premiums earned 1,871 1,986 (115) (5.8 %) 5,645 6,301 (656) (10.4 %)
Net premiums earned $ 11,645 $ 12,627 $ (982) (7.8 %) $ 34,697 $ 40,347 $ (5,650) (14.0 %)
The decrease in net premiums earned during the three and nine months ended September 30, 2025 as compared to the same respective periods of 2024 reflected the non-renewal of three SPCs during 2024 and the non-renewal of three SPCs during 2025, as previously discussed.
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Losses and Loss Adjustment Expenses
The following table summarizes the calendar year net loss ratios by separating losses between the current accident year and all prior accident years. The current accident year net loss ratio reflects the aggregate loss ratio for all programs. Loss reserves and associated reinsurance are estimated for each program on a quarterly basis. Each SPC has in place its own reinsurance agreement, and the attachment point of aggregate reinsurance coverage varies by program. Due to the size of some of the programs, quarterly loss results, including changes in estimated aggregate reinsurance, can create volatility in the current accident year net loss ratio from period to period.
Calendar year and current accident year net loss ratios for the three and nine months ended September 30, 2025 and 2024 were as follows:
Three Months Ended September 30 Nine Months Ended September 30
2025 2024 Change 2025 2024 Change
Calendar year net loss ratio
52.6 % 61.8 % (9.2 pts) 54.0 % 65.6 % (11.6 pts)
Less impact of prior accident years on the net loss ratio
(21.4 %) (16.1 %) (5.3 pts) (14.8 %) (3.9 %) (10.9 pts)
Current accident year net loss ratio
74.0 % 77.9 % (3.9 pts) 68.8 % 69.5 % (0.7 pts)
The current accident year net loss ratio decreased for the 2025 three- and nine-month periods as compared to the same respective periods of 2024, primarily reflecting a reduction in average claim severity, partially offset by changes in estimated program year aggregate reinsurance recoveries, which increased the 2025 loss ratios by 2.3 and 0.5 percentage points, respectively, compared to a decrease of 6.1 and 2.0 percentage points for the same respective periods of 2024.
We recognized net favorable prior year reserve development of $2.5 million and $5.2 million for the three and nine months ended September 30, 2025, respectively, as compared to net favorable prior year reserve development of $2.1 million and $1.5 million for the same respective periods of 2024. The development for the 2025 three- and nine-month periods was driven by net favorable development in the workers' compensation business reflecting favorable trends in claim closing patterns primarily in accident years 2021 through 2024. The development for the 2024 three- and nine-month periods reflected net favorable development in the workers' compensation business of $2.1 million and $2.9 million, respectively, which reflected overall favorable trends in claim closing patterns primarily in accident years 2020 through 2022. Partially offsetting the favorable development for the 2024 nine-month period was net unfavorable development of $1.4 million in the medical professional liability business in the first quarter of 2024, which primarily reflected higher than expected claim frequency in the program that assumed both workers' compensation and medical professional liability insurance, which was non-renewed effective January 1, 2024. We do not participate in the underwriting results of this program.
Underwriting, Policy Acquisition and Operating Expenses
Underwriting Expense Ratio (the Expense Ratio)
See further information regarding our Segregated Portfolio Cell Reinsurance segment's underwriting, policy acquisition and operating expenses in Note 12 of the Notes to Condensed Consolidated Financial Statements. The underwriting expense ratios included the impact of the following:
Three Months Ended September 30 Nine Months Ended September 30
2025 2024 Change 2025 2024 Change
Underwriting expense ratio, as reported 35.7% 32.8% 2.9 pts 35.3% 35.0% 0.3 pts
Less: impact of audit premium on expense ratio (4.8%) (1.9%) (2.9 pts) (3.6%) (2.9%) (0.7 pts)
Underwriting expense ratio, excluding the effect of audit premium 40.5% 34.7% 5.8 pts 38.9% 37.9% 1.0 pts
Excluding the effect of audit premium, the increase in the underwriting expense ratio for the 2025 three- and nine-month periods as compared to the same respective periods of 2024 primarily reflected a decrease in premiums earned, as previously discussed.
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Segment Results - Corporate
Our Corporate segment includes our investment operations excluding those reported in our Segregated Portfolio Cell Reinsurance segment as discussed in Note 16 of the Notes to Consolidated Financial Statements in our December 31, 2024 report on Form 10-K. In addition, this segment includes corporate expenses, interest expense, U.S. and U.K. income taxes and foreign currency exchange rate gains and losses. As previously discussed under the heading "ProAssurance Overview," we changed the composition of our operating and reportable segments during the first quarter of 2025. As a result, we now report the financial results of our subsidiary IAO, Inc. d/b/a ProAssurance Agency in the Specialty P&C segment which were previously reported in the Corporate segment. All prior period segment information has been recast to conform to the current period presentation. The change in presentation had no impact on previously reported consolidated financial results. See further information regarding this presentation change in Note 12 of the Notes to Condensed Consolidated Financial Statements.
Segment results for the three and nine months ended September 30, 2025 and nine months ended September 30, 2024 exclude transaction-related costs including the associated income tax benefit and, for the nine months ended September 30, 2024, the change in fair value of contingent consideration as we do not consider these items in assessing the financial performance of the segment. Transaction-related costs in 2025 are attributable to the proposed merger transaction with The Doctors Company. Transaction-related costs in 2024 are associated with actuarial consulting fees paid in relation to the final determination of contingent consideration associated with the NORCAL acquisition. For additional information on the proposed merger transaction with The Doctors Company, see Note 1 of the Notes to Condensed Consolidated Financial Statements. Segment results for our Corporate segment were net earnings of $27.1 million and $65.0 million for the three and nine months ended September 30, 2025, respectively, as compared to $18.2 million and $64.2 million for the same respective periods of 2024 and included the following:
Three Months Ended September 30 Nine Months Ended September 30
($ in thousands) 2025 2024 Change 2025 2024 Change
Net investment income
$ 39,342 $ 36,263 $ 3,079 8.5 % $ 113,508 $ 105,040 $ 8,468 8.1 %
Equity in earnings (loss) of unconsolidated subsidiaries
$ 4,731 $ 4,767 $ (36) (0.8 %) $ 13,330 $ 16,383 $ (3,053) (18.6 %)
Net investment gains (losses)
$ 45 $ 1,653 $ (1,608) (97.3 %) $ (2,405) $ (3,921) $ 1,516 38.7 %
Other income (expense)
$ (1,003) $ (3,850) $ 2,847 73.9 % $ (10,040) $ (1,340) $ (8,700) (649.3 %)
Operating expense
$ 7,835 $ 10,290 $ (2,455) (23.9 %) $ 24,806 $ 27,084 $ (2,278) (8.4 %)
Interest expense
$ 5,236 $ 5,698 $ (462) (8.1 %) $ 15,620 $ 17,004 $ (1,384) (8.1 %)
Income tax expense (benefit)
$ 2,928 $ 4,657 $ (1,729) (37.1 %) $ 9,001 $ 7,837 $ 1,164 14.9 %
Net Investment Income
Net investment income is primarily derived from the income earned by our fixed maturity securities and also includes dividend income from equity securities, income from our short-term and cash equivalent investments, earnings from other investments and changes in the cash surrender value of BOLI contracts, net of investment fees and expenses.
Net investment income (loss) by investment category was as follows:
Three Months Ended September 30 Nine Months Ended September 30
($ in thousands) 2025 2024 Change 2025 2024 Change
Fixed maturities $ 36,508 $ 33,546 $ 2,962 8.8 % $ 106,847 $ 97,567 $ 9,280 9.5 %
Equities 1,027 1,197 (170) (14.2 %) 3,142 3,253 (111) (3.4 %)
Short-term investments, including Other 2,840 2,623 217 8.3 % 7,258 8,318 (1,060) (12.7 %)
BOLI 927 1,101 (174) (15.8 %) 2,166 2,087 79 3.8 %
Investment fees and expenses (1,960) (2,204) 244 (11.1 %) (5,905) (6,185) 280 (4.5 %)
Net investment income $ 39,342 $ 36,263 $ 3,079 8.5 % $ 113,508 $ 105,040 $ 8,468 8.1 %
Fixed Maturities
Income from our fixed maturities increased during the 2025 three- and nine-month periods as compared to the same respective periods of 2024 driven by higher average book yields as we take advantage of the current interest rate environment as our portfolio matures. Additionally, average investment balances were approximately 1.4% lower for the 2025 three-month period and 0.3% higher for the 2025 nine-month period as compared to the same respective periods of 2024.
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Average yields for our fixed maturity portfolio were as follows:
Three Months Ended September 30 Nine Months Ended September 30
2025 2024 2025 2024
Average income yield 3.9% 3.5% 3.8% 3.5%
Average tax equivalent income yield 3.9% 3.5% 3.8% 3.5%
Short-term Investments and Other Investments
Short-term investments, which have a maturity at purchase of one year or less, are carried at fair value, which approximates their cost basis, and are primarily composed of investments in U.S. treasury obligations, commercial paper, money market funds and a certificate of deposit. Income from our short-term and other investments remained relatively unchanged for the 2025 three-month period and decreased for the 2025 nine-month period primarily due to lower average investment balances and lower yields given the decrease in interest rates.
Equity in Earnings (Loss) of Unconsolidated Subsidiaries
Equity in earnings (loss) of unconsolidated subsidiaries was comprised as follows:
Three Months Ended September 30 Nine Months Ended September 30
($ in thousands) 2025 2024 Change 2025 2024 Change
All other investments, primarily investment fund LPs/LLCs
$ 3,954 $ 5,218 $ (1,264) (24.2 %) $ 12,548 $ 16,546 $ (3,998) (24.2 %)
Tax credit partnerships 777 (451) 1,228 272.3 % 782 (163) 945 579.8 %
Equity in earnings (loss) of unconsolidated subsidiaries $ 4,731 $ 4,767 $ (36) (0.8 %) $ 13,330 $ 16,383 $ (3,053) (18.6 %)
We hold interests in certain LPs/LLCs that generate earnings from trading portfolios, secured debt, debt securities, multi-strategy funds and private equity investments. The performance of the LPs/LLCs is affected by the volatility of equity and credit markets. For our investments in LPs/LLCs, we record our allocable portion of the partnership operating income or loss as the results of the LPs/LLCs become available, typically following the end of a reporting period. Our investment results from our portfolio of investments in LPs/LLCs decreased for the 2025 three- and nine-month periods as compared to the same respective periods of 2024 primarily due to the performance of certain LPs/LLCs which reflected lower market valuations during the first half of 2025.
Our tax credit partnership investments are designed to generate returns in the form of tax credits and tax-deductible project operating losses and are comprised of qualified affordable housing project tax credit partnerships and a historic tax credit partnership. We account for our tax credit partnership investments under the equity method and record our allocable portion of the operating losses of the underlying properties based on estimates provided by the partnerships. These tax credit partnership investments are reaching the end of their lifecycle, therefore partnership operating losses and tax benefits associated with these investments have been and are expected to continue to be nominal in amount. However, we may receive distributions from time to time due to the sale of properties, as was the case during the third quarter of 2025. See additional information on our tax credit partnership investments in Note 3 of the Notes to Condensed Consolidated Financial Statements.
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Net Investment Gains (Losses)
The following table provides detailed information regarding our net investment gains (losses).
Three Months Ended September 30 Nine Months Ended September 30
(In thousands) 2025 2024 2025 2024
Total impairment losses
Corporate debt $ (1,868) $ (1,398) $ (1,408) $ (2,710)
Asset-backed securities 7 (403) 274 (592)
Portion of impairment losses recognized in other comprehensive income before taxes:
Corporate debt 605 — 503 102
Net impairment losses recognized in earnings (1,256) (1,801) (631) (3,200)
Gross realized gains, available-for-sale fixed maturities 244 484 1,347 1,156
Gross realized (losses), available-for-sale fixed maturities (238) (1,567) (5,174) (3,616)
Net realized gains (losses), trading fixed securities 20 5 32 18
Net realized gains (losses), equity investments — — (2,034) (704)
Net realized gains (losses), other investments — (245) (158) (826)
Change in unrealized holding gains (losses), trading fixed securities 17 (5) (85) 165
Change in unrealized holding gains (losses), equity investments 1,168 4,556 4,083 2,235
Change in unrealized holding gains (losses), convertible securities, carried at fair value as a part of other investments 90 267 214 873
Other — (41) 1 (22)
Other net investment gains (losses) 1,301 3,454 (1,774) (721)
Net investment gains (losses) $ 45 $ 1,653 $ (2,405) $ (3,921)
For the three and nine months ended September 30, 2025, we recognized $1.3 million and $0.6 million of credit-related impairment losses in earnings, respectively, and $0.6 million and $0.5 million of non-credit impairment losses in OCI, respectively, primarily related to corporate bonds in the consumer, communication and real estate sectors. For the three and nine months ended September 30, 2024, we recognized $1.8 million and $3.2 million of credit-related impairment losses in earnings, respectively, primarily related to corporate bonds in the real estate sector. We recognized a nominal amount of non-credit impairment losses in OCI during the 2024 nine-month period related to a corporate bond in the consumer sector.
During the three months ended September 30, 2025, we recognized $1.3 million of other net investment gains driven by unrealized holding gains resulting from changes in the fair value of our equity investments. We recognized $1.8 million of other net investment losses during the nine months ended September 30, 2025 driven by realized losses from the sale of certain available-for-sale fixed maturities, largely offset by unrealized holding gains resulting from changes in the fair value of our equity investments.
We recognized $3.5 million of other net investment gains during the three months ended September 30, 2024 driven by unrealized holding gains resulting from changes in the fair value of our equity investments, partially offset by realized losses from the sale of certain available-for-sale fixed maturities. During the nine months ended September 30, 2024, we recognized $0.7 million of other net investment losses driven by realized losses from the sale of certain available-for-sale fixed maturities.
Operating Expenses
Corporate segment operating expenses were comprised as follows:
Three Months Ended September 30 Nine Months Ended September 30
($ in thousands) 2025 2024 Change 2025 2024 Change
Operating expenses $ 9,399 $ 11,939 $ (2,540) (21.3 %) $ 29,214 $ 31,658 $ (2,444) (7.7 %)
Management fee offset (1,564) (1,649) 85 (5.2 %) (4,408) (4,574) 166 (3.6 %)
Total $ 7,835 $ 10,290 $ (2,455) (23.9 %) $ 24,806 $ 27,084 $ (2,278) (8.4 %)
Operating expenses decreased for the 2025 three- and nine-month periods as compared to the same respective periods of 2024 driven by a decrease in compensation-related costs and a decrease in various other operating expenses, none of which were individually significant. The decrease in compensation-related costs during the 2025 three- and nine-month periods
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primarily reflected higher amounts accrued for performance-related incentive plans during the prior year periods due to higher achievement of the related performance metrics. The decrease for the 2025 nine-month period was partially offset by an increase in share based compensation expenses attributable to the effect of an increase in the value of projected long-term incentive awards during 2025 based upon the improvement of one of the associated performance metrics and the timing of grants of prior year share-based awards.
Core domestic insurance subsidiaries within our Specialty P&C segment and our Workers' Compensation Insurance segment are charged a management fee by the Corporate segment for services provided to these subsidiaries. The management fee is based on the extent to which services are provided to the subsidiary and the amount of premium written by the subsidiary. Under the arrangement, the expenses associated with such services are reported as expenses of the Corporate segment, and the management fees charged are reported as an offset to Corporate operating expenses. While the terms of the arrangement were consistent between 2025 and 2024, fluctuations in the amount of premium written by each subsidiary can result in corresponding variations in the management fee charged to each subsidiary during a particular period.
Interest Expense
Interest expense for the three and nine months ended September 30, 2025 and 2024 was comprised as follows:
Three Months Ended September 30 Nine Months Ended September 30
($ in thousands) 2025 2024 Change 2025 2024 Change
Contribution Certificates (including accretion)(1)
$ 1,779 $ 1,930 $ (151) (7.8 %) $ 5,270 $ 5,749 $ (479) (8.3 %)
Revolving Credit Agreement (including fees and amortization)
2,177 2,655 (478) (18.0 %) 6,502 7,919 (1,417) (17.9 %)
Term Loan (including fees and amortization) 1,958 2,465 (507) (20.6 %) 5,899 7,377 (1,478) (20.0 %)
(Gain)/loss on cash flow hedges reclassified from AOCI (678) (1,352) 674 (49.9 %) (2,051) (4,041) 1,990 (49.2 %)
Interest expense $ 5,236 $ 5,698 $ (462) (8.1 %) $ 15,620 $ 17,004 $ (1,384) (8.1 %)
(1) Includes accretion of approximately $0.3 million and $1.0 million for the three and nine months ended September 30, 2025, respectively, as compared to $0.4 million and $1.4 million during the same respective periods of 2024, which is recorded as an increase to interest expense as a result of the difference between the recorded acquisition date fair value and the principal balance of the Contribution Certificates associated with our acquisition of NORCAL.
Interest expense decreased for the three and nine months ended September 30, 2025 as compared to the same respective periods of 2024 driven by lower interest expense on our Revolving Credit Agreement and Term Loan due to a decrease in the margin component of the rates as a result of our lower debt to capitalization ratio during the second half of 2024. Interest expense in both periods also includes the impact of our Interest Rate Swaps, which are designated as highly effective cash flow hedges to manage our exposure to interest rate risk due to variability in the base rates on the borrowings under both the Revolving Credit Agreement and Term Loan. See further discussion on our outstanding debt in Note 7 of the Notes to Condensed Consolidated Financial Statements and additional information regarding our Interest Rate Swaps in Note 8 of the Notes to Condensed Consolidated Financial Statements.
Taxes
Tax expense allocated to our Corporate segment includes U.S. and U.K. tax expense including U.S. tax expense incurred from our corporate membership in Lloyd's of London, if any. The SPCs at Inova Re, one of our Cayman Islands reinsurance subsidiaries, have each made a 953(d) election under the U.S. Internal Revenue Code and are subject to U.S. federal income tax; therefore, tax expense allocated to our Corporate segment also includes tax expense incurred from any SPC at Inova Re in which we have a participation interest of 80% or greater as those SPCs are required to be included in our consolidated tax return. Consolidated tax expense (benefit) reflects the tax expense (benefit) of both segments and the tax impact of items excluded from segment reporting, as shown in the table below:
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Three Months Ended
September 30 Nine Months Ended
September 30
(In thousands) 2025 2024 2025 2024
Corporate segment income tax expense (benefit)
$ 2,928 $ 4,657 $ 9,001 $ 7,837
Income tax expense (benefit) - transaction-related costs* (5) — (1,074) (67)
Consolidated income tax expense (benefit)
$ 2,923 $ 4,657 $ 7,927 $ 7,770
*For the three and nine months ended September 30, 2025, represents the income tax benefit associated with the deductible professional fees incurred related to the proposed merger transaction with The Doctors Company (see Note 1 of the Notes to Condensed Consolidated Financial Statements). For the nine months ended September 30, 2024, transaction-related costs represent actuarial consulting fees paid in relation to the final determination of contingent consideration associated with the NORCAL acquisition. These costs are not included in a segment as we do not consider these costs in assessing the financial performance of any of our operating or reportable segments. See Note 12 of the Notes to Condensed Consolidated Financial Statements for a reconciliation of our segment results to our consolidated results.
Listed below are the primary factors affecting our consolidated effective tax rate for the three and nine months ended September 30, 2025 and 2024. These factors include the following:
Three Months Ended September 30
2025 2024
($ in thousands) Income tax (benefit) expense Rate Impact Income tax (benefit) expense Rate Impact
Computed "expected" tax expense (benefit) at statutory rate $ 917 21.0 % $ 4,430 21.0 %
Tax-exempt income(1)
(308) (7.0 %) (366) (1.7 %)
Non-U.S. operating results 662 15.2 % (182) (0.9 %)
Transaction-related costs(2)
555 12.7 % — — %
Estimated annual tax rate differential(3)
300 6.9 % 502 2.5 %
Change in limitation of future deductibility of certain executive compensation(4)
313 7.2 % 193 0.9 %
State income taxes
208 4.8 % 157 0.7 %
Other 276 6.1 % (77) (0.4 %)
Total income tax expense (benefit) $ 2,923 66.9 % $ 4,657 22.1 %
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Nine Months Ended September 30
2025 2024
($ in thousands) Income tax (benefit) expense Rate Impact Income tax (benefit) expense Rate Impact
Computed "expected" tax expense (benefit) at statutory rate
$ 5,349 21.0 % $ 9,312 21.0 %
Tax-exempt income(1)
(804) (3.1 %) (889) (2.0 %)
Non-U.S. operating results 817 3.2 % (586) (1.3 %)
Tax deficiency (excess tax benefit) on share-based compensation 57 0.2 % 707 1.6 %
Transaction-related costs(2)
1,491 5.9 % — — %
Estimated annual tax rate differential(3)
(315) (1.2 %) 367 0.8 %
Change in limitation of future deductibility of certain executive compensation(4)
1,531 6.0 % (330) (0.7 %)
Non-taxable contingent consideration(5)
— — % (1,415) (3.2 %)
Change in uncertain tax positions(6)
(783) (3.1 %) 276 0.6 %
State Income Taxes 305 1.2 % 601 1.4 %
Other 279 1.0 % (273) (0.7 %)
Total income tax expense (benefit) $ 7,927 31.1 % $ 7,770 17.5 %
(1) Includes tax-exempt interest, dividends received deduction and change in cash surrender value of BOLI.
(2) Represents the tax impact of the non-deductible portion of transaction-related costs incurred during 2025 associated with the proposed merger transaction with The Doctors Company (see Note 1 of the Notes to Condensed Consolidated Financial Statements).
(3) Represents the tax rate differential between our actual effective tax rate for the three and nine months ended September 30, 2025 and 2024 and our projected annual effective tax rate as of September 30, 2025 and September 30, 2024 as calculated under the estimated annual effective tax rate method.
(4) Represents the amount of executive compensation that is in excess of the statutory limitation for the three and nine months ended September 30, 2025 and 2024.
(5) Represents the tax impact of a decrease in the contingent consideration liability issued in connection with the NORCAL acquisition of $6.5 million and the reversal of a nominal amount of associated contingent investment banker fees accrued during the purchase accounting for the nine months ended September 30, 2024. See further discussion on the contingent consideration in Note 2 of the Notes to Consolidated Financial Statements in our December 31, 2024 report on Form 10-K.
(6) We evaluate tax positions taken on tax returns and recognize positions in the financial statements when it is more likely than not that the position will be sustained upon resolution with a taxing authority. We review uncertain tax positions each quarter considering changes in facts and circumstances and make adjustments as we consider necessary. As a result of this review, we remeasured the tax benefit related to uncertain tax positions during the second quarter of 2025.
Our effective tax rate for the 2025 nine-month period as shown in the table above differed from our projected annual effective tax rate of 25.2% due to certain discrete items. When we utilize the estimated annual effective tax rate method, certain items are treated as discrete items and are reflected in the effective tax rate in the period in which they are included in net income (loss). These discrete items increased our effective tax rate by 5.9% for the 2025 nine-month period. Our effective tax rate for the 2024 nine-month period of 17.5%, as shown in the table above, approximated our overall projected annual effective tax rate of 17.5% as of September 30, 2024 given discrete items had a minimal impact on the effective tax rate.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
We believe that we are principally exposed to three types of market risk: interest rate risk, credit risk and foreign currency risk.
Interest Rate Risk
Investments
Our fixed maturities portfolio is exposed to interest rate risk. Fluctuations in interest rates have a direct impact on the market valuation of these securities. As interest rates rise, market values of fixed income portfolios fall and vice versa. Certain of the securities are held in an unrealized loss position; we do not intend to sell and believe we will not be required to sell any debt security held in an unrealized loss position before its anticipated recovery. If recovery is not anticipated, we will record an impairment loss through earnings either by establishing a credit allowance or by directly reducing the security's amortized cost basis if there is an intent to sell.
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The following tables summarize estimated changes in the fair value of our available-for-sale fixed maturity securities for specific hypothetical changes in interest rates by asset class at September 30, 2025 and December 31, 2024. There are principally two factors that determine interest rates on a given security: changes in the level of yield curves and credit spreads. As different asset classes can be affected in different ways by movements in those two factors, we have separated our portfolio by asset class in the following tables.
Interest Rate Shift in Basis Points
September 30, 2025
($ in millions) (200) (100) Current 100 200
Fair Value:
Fixed maturities, available-for-sale:
U.S. Treasury obligations $ 260 $ 254 $ 248 $ 243 $ 238
U.S. Government-sponsored enterprise obligations 11 10 10 10 9
State and municipal bonds 492 471 451 431 412
Corporate debt 1,868 1,805 1,745 1,686 1,630
Asset-backed securities 1,298 1,263 1,225 1,185 1,143
Total fixed maturities, available-for-sale $ 3,929 $ 3,803 $ 3,679 $ 3,555 $ 3,432
Duration:
Fixed maturities, available-for-sale:
U.S. Treasury obligations 2.33 2.27 2.22 2.16 2.11
U.S. Government-sponsored enterprise obligations 3.30 3.34 3.66 3.94 4.03
State and municipal bonds 4.09 4.22 4.37 4.54 4.62
Corporate debt 3.38 3.39 3.39 3.35 3.28
Asset-backed securities 2.62 2.83 3.14 3.43 3.62
Total fixed maturities, available-for-sale 3.15 3.23 3.35 3.44 3.48

Interest Rate Shift in Basis Points
December 31, 2024
($ in millions) (200) (100) Current 100 200
Fair Value:
Fixed maturities, available-for-sale:
U.S. Treasury obligations $ 260 $ 252 $ 244 $ 236 $ 229
U.S. Government-sponsored enterprise obligations 16 15 15 14 14
State and municipal bonds 486 466 446 427 409
Corporate debt 1,832 1,779 1,728 1,679 1,632
Asset-backed securities 1,221 1,185 1,149 1,113 1,077
Total fixed maturities, available-for-sale $ 3,815 $ 3,697 $ 3,582 $ 3,469 $ 3,361
Duration:
Fixed maturities, available-for-sale:
U.S. Treasury obligations 2.49 2.43 2.38 2.33 2.28
U.S. Government-sponsored enterprise obligations 3.33 3.40 3.51 3.56 3.55
State and municipal bonds 4.04 4.13 4.25 4.41 4.50
Corporate debt 3.18 3.20 3.18 3.13 3.08
Asset-backed securities 2.81 2.96 3.05 3.15 3.19
Total fixed maturities, available-for-sale 3.13 3.19 3.22 3.24 3.23
Computations of prospective effects of hypothetical interest rate changes are based on numerous assumptions, including the maintenance of the existing level and composition of fixed income security assets, and should not be relied on as indicative of future results.
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Certain shortcomings are inherent in the method of analysis presented in the computation of the fair value of fixed rate instruments. Actual values may differ from the projections presented should market conditions vary from assumptions used in the calculation of the fair value of individual securities, including non-parallel shifts in the term structure of interest rates and changing individual issuer credit spreads.
At September 30, 2025, our fixed maturities portfolio includes fixed maturities classified as trading securities which do not have a significant amount of exposure to market interest rates or credit spreads.
Our cash and short-term investments at September 30, 2025 were carried at fair value which approximates their cost basis due to their short-term nature. Our cash and short-term investments lack significant interest rate sensitivity due to their short duration.
Debt
We are exposed to interest rate risk due to variability in the base rate on borrowings under our Revolving Credit Agreement and Term Loan. Borrowings under our Revolving Credit Agreement and Term Loan accrue interest at a selected SOFR base rate, adjusted by a margin. To manage our exposure to interest rate risk on any borrowings under these agreements, we entered into two Interest Rate Swaps which effectively fix the base rate on borrowings under the Revolving Credit Agreement and Term Loan to 3.187% and 3.207%, respectively. See further information regarding the Interest Rate Swaps in Note 8 of the Notes to Condensed Consolidated Financial Statements. As of September 30, 2025, the Revolving Credit Agreement and Term Loan have $125 million and $116 million in outstanding borrowings, respectively. Additional information regarding our debt is provided in Note 10 of the Notes to Consolidated Financial Statements in our December 31, 2024 report on Form 10-K.
Defined Benefit Pension Plan
We are exposed to certain economic risks related to the costs of our defined benefit pension plan, including changes in discount rates for high quality corporate bonds and changes in the expected return on plan assets.
Credit Risk
We have exposure to credit risk primarily as a holder of fixed income securities. We control this exposure by emphasizing investment grade credit quality in the fixed income securities we purchase.
As of September 30, 2025, 92% of our fixed maturity securities were rated investment grade as determined by NRSROs, such as Fitch, Moody’s and Standard & Poor’s. We believe that this concentration in investment grade securities reduces our exposure to credit risk on our fixed income investments to an acceptable level. However, investment grade securities, in spite of their rating, can rapidly deteriorate and result in significant losses. Ratings published by the NRSROs are one of the tools used to evaluate the creditworthiness of our securities. The ratings reflect the subjective opinion of the rating agencies as to the creditworthiness of the securities; therefore, we may be subject to additional credit exposure should the ratings prove to be unreliable.
We also have exposure to credit risk related to our premiums receivable and receivables from reinsurers; however, to-date we have not experienced any significant amount of credit losses. At September 30, 2025, our premiums receivable was approximately $256 million, net of an allowance for expected credit losses of approximately $8 million. See Note 1 of the Notes to Consolidated Financial Statements in our December 31, 2024 report on Form 10-K for further information on our allowance for expected credit losses related to our premiums receivable. Our receivables from reinsurers (with regard to both paid and unpaid losses) approximated $381 million at September 30, 2025 and $427 million at December 31, 2024. We monitor the credit risk associated with our reinsurers using publicly available financial and rating agency data. We have not historically experienced material credit losses due to the financial condition of a reinsurer, and as of September 30, 2025 our expected credit losses associated with our receivables from reinsurers were nominal in amount.
Foreign Currency Risk
Foreign currency exchange rate gains (losses) are reported in our Corporate segment and are primarily related to foreign currency denominated loss reserves associated with premium assumed from an international medical professional liability insurer in our Specialty P&C segment. Our participation in this program has grown in recent years which has led to greater volatility in our results of operations even with nominal movements in exchange rates given the size of the reserve. Historically, we mitigated foreign currency exchange exposure and managed market risks that arise in the normal course of business by matching the currency and duration of associated investments to the corresponding loss reserves. During the first quarter of 2025, we changed our hedging strategy around foreign currency exchange exposures. Instead of investing in foreign currency denominated available-for-sale fixed maturities, we began utilizing foreign currency forward contracts. Foreign currency forward contracts are typically short-term in nature with a maturity at inception of less than three months. At September 30, 2025, we had two foreign currency forward contracts with a notional amount of €105.0 million ($124.7 million based on
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September 30, 2025 exchange rates) and a fair value of approximately $1.5 million included as a component of other liabilities on the Condensed Consolidated Balance Sheet. The counterparty to the foreign currency forward contract is a major financial institution which had an investment grade rating of BBB as of September 30, 2025. Additional information regarding our foreign currency forward contracts is provided in Note 8 of the Notes to Condensed Consolidated Financial Statements and in the Executive Summary of Operations section under the heading "Revenues."
ITEM 4. CONTROLS AND PROCEDURES.
The principal executive officer and principal financial officer of the Company participated in management’s evaluation of our disclosure controls and procedures (as defined in SEC Rule 13a-15(e)) as of September 30, 2025. ProAssurance’s disclosure controls and procedures are designed to reasonably assure that information required to be disclosed by us in reports we file or submit under the Exchange Act is accumulated and communicated to our management as appropriate to allow timely decisions regarding disclosure and is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Based on that evaluation, the principal executive officer and principal financial officer have concluded that our disclosure controls and procedures are effective.
Changes in Internal Control over Financial Reporting
There have been no significant changes in our internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, those controls during the quarter.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
See Note 6 of the Notes to Condensed Consolidated Financial Statements.
ITEM 1A. RISK FACTORS.
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 December 31, 2024 report on Form 10-K and other documents we file with the SEC, such as our current reports on Form 8-K. Other than as described below, there have been no material changes to the "Risk Factors" disclosed in Part 1, Item 1A of ProAssurance's December 31, 2024 report on Form 10-K.
There are numerous risks and uncertainties associated with the proposed acquisition by The Doctors Company.
We have entered into a definitive agreement to be acquired by The Doctors Company through a proposed merger transaction. See Note 1 of the Notes to Condensed Consolidated Financial Statements for further information. There are numerous risks and uncertainties around the transaction including, among others:
•risk that the parties are unable to complete the planned acquisition on the anticipated terms and timing. The transaction is subject to a number of closing conditions, including but not limited to receipt of regulatory approvals. The failure to satisfy all the required conditions could prevent the acquisition from occurring. In addition, regulators could impose additional requirements or obligations as conditions for their approval. We can provide no assurance that we will obtain the necessary approvals within the estimated timeframe or at all, or that any such requirements that are imposed by regulators would not result in the termination of the transaction.
•risk that the Company’s stock price may fluctuate during the pendency of the proposed transaction and may decline if the proposed transaction is not completed;
•potential litigation relating to the proposed transaction that could be instituted against the Company or its directors, managers or officers, including the effects of any outcomes related thereto;
•risk that disruptions from the proposed transaction will harm the Company’s business, including current plans and operations, including during the pendency of the proposed transaction;
•ability of the Company to retain and hire key personnel;
•diversion of management’s time and attention from ordinary course business operations to completion of the proposed transaction and integration matters;
•potential adverse reactions or changes to business relationships resulting from the announcement or completion of the proposed transaction;
•potential business uncertainty, including changes to existing business relationships, during the pendency of the proposed transaction that could affect the Company’s financial performance;
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•certain restrictions during the pendency of the proposed transaction that may impact the Company’s ability to pursue certain business opportunities or strategic transactions;
•possibility that the proposed transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events;
•unexpected costs, liabilities or delays associated with the transaction;
•behavior of competitors in response to the transaction; and
•occurrence of any event, change or other circumstance that could give rise to the termination of the proposed transaction, including in circumstances requiring the Company to pay a termination fee.
Any of these events could materially adversely affect our business, financial condition, results of operations, cash flows, liquidity and stock price.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
(a)Not applicable.
(b)Not applicable.
(c)Information required by Item 703 of Regulation S-K.
Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs* (In thousands)
July 1 - July 31, 2025 — N/A — $55,902
August 1 - August 31, 2025 — N/A — $55,902
September 1 - September 30, 2025 — N/A — $55,902
Total — $— —
*Under its current plan begun in November 2010, the Board has authorized $600 million for the repurchase of common shares or the retirement of outstanding debt. This is ProAssurance’s only plan for the repurchase of common shares, and the plan has no expiration date.
ITEM 5. OTHER INFORMATION
During the three months ended September 30, 2025, no director or officer of the Company adopted, modified or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement, as each term is defined in Item 408(a) of Regulation S-K.
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ITEM 6. EXHIBITS
Exhibit Number Description
31.1
Certification of Principal Executive Officer of ProAssurance as required under SEC rule 13a-14(a).
31.2
Certification of Principal Financial and Accounting Officer of ProAssurance as required under SEC rule 13a-14(a).
32.1
Certification of Principal Executive Officer of ProAssurance as required under SEC Rule 13a-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code, as amended (18 U.S.C. 1350).
32.2
Certification of Principal Financial and Accounting Officer of ProAssurance as required under SEC Rule 13a-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code, as amended (18 U.S.C. 1350).
101.INS
XBRL Instance Document
101.SCH
XBRL Taxonomy Extension Schema Document
101.CAL
XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
XBRL Taxonomy Extension Definition Linkbase Document
101.LAB
XBRL Taxonomy Extension Labels Linkbase Document
101.PRE
XBRL Taxonomy Extension Presentation Linkbase Document
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
PROASSURANCE CORPORATION
November 4, 2025

/s/    Dana S. Hendricks
Dana S. Hendricks
Chief Financial Officer
(Duly authorized officer and principal financial officer)
83

Source: View Original Filing on SEC EDGAR

FAQ

What were ProAssurance (PRA) Q3 2025 results?

Total revenues were $279,554 (in thousands) and net income was $1,446 (in thousands), for EPS of $0.03.

How did underwriting and investment activity affect Q3 performance for PRA?

Net premiums earned were $233,404 (in thousands); net investment income was $40,442 (in thousands). Losses and LAE were $186,199 (in thousands).

What is the status and price of the ProAssurance merger?

The all‑cash merger is set at $25.00 per share, with several state approvals received and other reviews pending.

What merger‑related costs did PRA record?

Transaction costs were approximately $3.0 million in Q3 and $14.6 million year‑to‑date.

What balance sheet changes stand out for PRA?

Shareholders’ equity was $1,304,252 (in thousands); AOCI improved to $(90,841); reserves for losses and LAE were $3,118,937 (in thousands).

What were PRA’s operating cash flows year‑to‑date?

Net cash provided by (used in) operating activities was $(12,476) (in thousands).

When does PRA anticipate closing the merger?

The company currently anticipates closing by June 30, 2026, subject to remaining approvals and conditions.

[10-Q] PROASSURANCE CORP Quarterly Earnings Report

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FAQ

What were ProAssurance (PRA) Q3 2025 results?

How did underwriting and investment activity affect Q3 performance for PRA?

What is the status and price of the ProAssurance merger?

What merger‑related costs did PRA record?

What balance sheet changes stand out for PRA?

What were PRA’s operating cash flows year‑to‑date?

When does PRA anticipate closing the merger?

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☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	PRA	New York Stock Exchange


Term			Meaning


AOCI			Accumulated other comprehensive income (loss)
ASU			Accounting Standards Update

Board			Board of Directors of ProAssurance Corporation
BOLI			Business owned life insurance
CARES Act			Coronavirus Aid, Relief and Economic Security Act


CODM			Chief Operating Decision Maker



DDR			Death, disability and retirement
DPAC			Deferred policy acquisition costs
Eastern Re			Eastern Re, LTD, S.P.C.
EBUB			Earned but unbilled premium

ERC			Employee Retention Credit

FAL			Funds at Lloyd's
FASB			Financial Accounting Standards Board

FHLB			Federal Home Loan Bank
FHLMC			Federal Home Loan Mortgage Corporation
FNMA			Federal National Mortgage Association

GAAP			Generally accepted accounting principles in the United States of America

GNMA			Government National Mortgage Association
IBNR			Incurred but not reported
Inova Re			Inova Re, LTD, S.P.C.
Interest Rate Swaps			ProAssurance's two forward-starting interest rate swap agreements associated with its Revolving Credit Agreement and Term Loan
IRS			Internal Revenue Service


LLC			Limited liability company
Lloyd's			Lloyd's of London market
LP			Limited partnership

MPL			Medical Professional Liability
Medical Technology Liability			Medical technology and life sciences products liability



NAV			Net asset value

NOL			Net operating loss

NORCAL			NORCAL Insurance Company, formerly known as NORCAL Mutual Insurance Company
NRSRO			Nationally recognized statistical rating organization
NYSE			New York Stock Exchange
OBBBA			One Big Beautiful Bill Act H.R.1 of 2025
OCI			Other comprehensive income (loss)


PCAOB			Public Company Accounting Oversight Board


PPM RRG			Preferred Physicians Medical Risk Retention Group, a Mutual Insurance Company


Revolving Credit Agreement			ProAssurance's $250 million revolving credit agreement
ROE			Return on equity
ROU			Right-of-use


SEC			Securities and Exchange Commission


SOFR			Secured Overnight Financing Rate
SPC			Segregated portfolio cell

Specialty P&C			Specialty Property and Casualty
Syndicate 1729			Lloyd's of London Syndicate 1729


Term			Meaning
Syndicate 6131			Lloyd's of London Syndicate 6131 was a Special Purpose Arrangement with Lloyd's of London Syndicate 1729.


TCJA			Tax Cuts and Jobs Act H.R.1 of 2017
Term Loan			ProAssurance's $125 million delayed draw term loan
U.K.			United Kingdom of Great Britain and Northern Ireland
ULAE			Unallocated loss adjustment expenses
VIE			Variable interest entity
VOBA			Value of business acquired


l			changes in general economic conditions, including the impact of inflation, including medical and social inflation, and unemployment;

l			regulatory, legislative and judicial actions or decisions that could affect our business plans or operations;
l			the enactment or repeal of tort reforms;
l			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;
l			changes in the interest, tax and foreign currency exchange rate environment;
l			resolution of uncertain tax matters and changes in tax laws;
l			changes in laws or government regulations regarding financial markets or market activity that may affect our business;
l			changes in the ability, or perception thereof, of the U.S. government to meet its obligations that may affect the U.S. economy and our business;
l			performance of financial markets affecting the fair value of our investments or making it difficult to determine the value of our investments;
l			changes in requirements or accounting policies and practices that may be adopted by our regulatory agencies, the governments of states in which we are domiciled, the FASB, the SEC, the PCAOB or the NYSE that may affect our business;
l			changes in laws or government regulations affecting the financial services industry, the property and casualty insurance industry, the workers' compensation insurance industry or particular insurance lines underwritten by our subsidiaries;
l			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;
l			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;
l			the effect of cyclical insurance industry trends on our underwriting, including demand and pricing in the insurance and reinsurance markets in which we operate;
l			uncertainties inherent in the estimate of our loss and loss adjustment expense reserve and reinsurance recoverable;
l			changes in the availability, cost, quality or collectability of insurance/reinsurance;
l			the results of litigation, including pre- or post-trial motions, trials and/or appeals we undertake;
l			effects on our claims costs from mass tort litigation that are different from that anticipated by us;
l			allegations of bad faith which may arise from our handling of any particular claim, including failure to settle;
l			loss or consolidation of independent agents, agencies, brokers or brokerage firms;
l			changes in our organization, compensation and benefit plans;


l			changes in the business or competitive environment may alter or limit the effectiveness of our business strategy and impact our revenues;
l			our ability to retain and recruit senior management and other qualified personnel;
l			the availability, integrity and security of our technology infrastructure and that of our third-party providers, including any susceptibility to cyber-attacks which might result in a loss of information, operating capability or actual monetary loss;
l			the impact of new systems or systems consolidation on our information technology infrastructure;
l			the impact of machine learning and artificial intelligence on the insurance industry as well as on our insureds and risks we insure;
l			the impact of a catastrophe, natural or man-made, including a pandemic event, as it relates to our business and insurance operations, investment results as well as on our insureds' operations and the risks for which we insure;


l			the impact of a catastrophic man-made event, such as acts of terrorism, acts of war and civil and political unrest;
l			the effects of terrorism-related insurance legislation and laws;
l			the impact of guaranty funds and other state assessments;


l			changes to the ratings assigned by a rating agency to our holding company or insurance subsidiaries, individually or as a group;
l			provisions in our charter documents, Delaware law and state insurance laws may impede attempts to replace or remove management or may impede a takeover;
l			state insurance restrictions may prohibit assets held by our insurance subsidiaries, including cash and investment securities, from being used for general corporate purposes;
l			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;
l			the risk that a condition for completion of the proposed merger transaction between ProAssurance Corporation and The Doctors Company, including the required regulatory approvals, may not be satisfied in a timely manner or at all;
l			the effects on our business and financial condition that may result if the proposed merger transaction with The Doctors Company is terminated prior to completion; and
l			our ability to retain customers, agents or management and other key personnel as a result of the proposed merger transaction with The Doctors Company.


	TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS

	CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - SEPTEMBER 30, 2025 AND DECEMBER 31, 2024	7

	CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN CAPITAL (UNAUDITED) - THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024	8

	CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED) - THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024	9

	CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024	10

	NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)	12

	BASIS OF PRESENTATION	12

	FAIR VALUE MEASUREMENT	14
	INVESTMENTS	21

	INCOME TAXES	28

	RESERVE FOR LOSSES AND LOSS ADJUSTMENT EXPENSES	28
	COMMITMENTS AND CONTINGENCIES	30

	DEBT	30
	DERIVATIVES	31
	SHAREHOLDERS' EQUITY	32
	VARIABLE INTEREST ENTITIES	33
	EARNINGS (LOSS) PER SHARE	34
	SEGMENT INFORMATION	34



ITEM 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	39

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	78

ITEM 4.	CONTROLS AND PROCEDURES	81

PART II. OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS	81
ITEM 1A.	RISK FACTORS	81
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	82
ITEM 5.	OTHER INFORMATION	82
ITEM 6.	EXHIBITS	83
SIGNATURE		83


	September 30, 2025		December 31, 2024
Assets
Investments
Fixed maturities, available-for-sale, at fair value (amortized cost, $3,798,274 and $3,803,835, respectively; allowance for expected credit losses, $4,031 and $3,399, respectively)	$	3,679,182	$	3,582,207
Fixed maturities, trading, at fair value (cost, $12,304 and $52,493, respectively)	12,390		53,157
Equity investments, at fair value (cost, $120,665 and $145,411, respectively)	110,198		130,158
Short-term investments	291,345		254,922
Business owned life insurance	82,346		80,179
Investment in unconsolidated subsidiaries	253,085		259,538
Other investments (at fair value, $2,137 and $2,077, respectively, otherwise at cost or amortized cost)	9,309		7,266
Total Investments	4,437,855		4,367,427
Cash and cash equivalents	54,457		54,881



Premiums receivable, net (allowance for expected credit losses, $7,957 and $8,141, respectively)	255,677		228,900
Receivable from reinsurers on paid losses and loss adjustment expenses	17,787		18,226
Receivable from reinsurers on unpaid losses and loss adjustment expenses	363,663		409,069
Prepaid reinsurance premiums	39,164		30,623
Deferred policy acquisition costs	59,895		59,026
Deferred tax asset, net	132,952		163,928
Real estate, net	14,873		29,581
Operating lease ROU assets	14,491		16,514
Intangible assets, net	49,822		54,208
Goodwill	5,500		5,500
Other assets	106,037		136,390
Total Assets	$	5,552,173	$	5,574,273
Liabilities and Shareholders' Equity
Liabilities
Policy liabilities and accruals
Reserve for losses and loss adjustment expenses	$	3,118,937	$	3,257,696
Unearned premiums	458,376		418,756
Reinsurance premiums payable	26,091		27,289
Total Policy Liabilities and Accruals	3,603,404		3,703,741

Operating lease liabilities	15,321		17,390
Other liabilities	207,673		226,520
Debt less unamortized debt issuance costs	421,523		424,873
Total Liabilities	4,247,921		4,372,524
Shareholders' Equity
Common shares (par value $0.01 per share, 100,000,000 shares authorized, 64,020,611 and 63,763,789 shares issued, respectively)	640		638
Additional paid-in capital	411,877		408,471
Accumulated other comprehensive income (loss) (net of deferred tax expense (benefit) of ($24,560) and ($46,681), respectively)	(90,841)		(172,391)
Retained earnings	1,452,270		1,434,725
Treasury shares, at cost (12,606,968 shares as of each respective period end)	(469,694)		(469,694)
Total Shareholders' Equity	1,304,252		1,201,749
Total Liabilities and Shareholders' Equity	$	5,552,173	$	5,574,273


	Common Stock		Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Treasury Stock		Total
Balance at July 1, 2025	$	640	$	410,036	$	(116,556)	$	1,450,824	$	(469,694)	$	1,275,250



Share-based compensation	—		1,841		—		—		—		1,841


Other comprehensive income (loss)	—		—		25,715		—		—		25,715
Net income (loss)	—		—		—		1,446		—		1,446
Balance at September 30, 2025	$	640	$	411,877	$	(90,841)	$	1,452,270	$	(469,694)	$	1,304,252


	Three Months Ended September 30				Nine Months Ended September 30
	2025		2024		2025		2024
Revenues
Net premiums earned	$	233,404	$	243,160	$	702,086	$	727,176
Net investment income	40,442		37,272		116,326		107,727
Equity in earnings (loss) of unconsolidated subsidiaries	4,731		4,767		13,330		16,383
Net investment gains (losses):
Impairment losses	(1,861)		(1,801)		(1,134)		(3,302)
Portion of impairment losses recognized in other comprehensive income (loss) before taxes	605		—		503		102
Net impairment losses recognized in earnings	(1,256)		(1,801)		(631)		(3,200)
Other net investment gains (losses)	2,097		4,053		5		8,346
Total net investment gains (losses)	841		2,252		(626)		5,146
Other income (expense)	136		(2,198)		(2,731)		3,872
Total revenues	279,554		285,253		828,385		860,304
Expenses


Net losses and loss adjustment expenses	186,199		176,331		536,097		557,025
Underwriting, policy acquisition and operating expenses:
Operating expense	46,817		48,036		146,772		138,544
DPAC amortization	34,601		32,353		98,749		99,864
SPC U.S. federal income tax expense (benefit)	658		377		1,913		1,043
SPC dividend expense (income)	1,674		1,360		3,762		2,479
Interest expense	5,236		5,698		15,620		17,004

Total expenses	275,185		264,155		802,913		815,959

Income (loss) before income taxes	4,369		21,098		25,472		44,345
Provision for income taxes:
Current expense (benefit)	255		881		(742)		901
Deferred expense (benefit)	2,668		3,776		8,669		6,869
Total income tax expense (benefit)	2,923		4,657		7,927		7,770
Net income (loss)	1,446		16,441		17,545		36,575
Other comprehensive income (loss), after tax, net of reclassification adjustments	25,715		80,929		81,550		79,381
Comprehensive income (loss)	$	27,161	$	97,370	$	99,095	$	115,956
Earnings (loss) per share:
Basic	$	0.03	$	0.32	$	0.34	$	0.72
Diluted	$	0.03	$	0.32	$	0.34	$	0.71
Weighted average number of common shares outstanding:
Basic	51,414		51,156		51,317		51,077
Diluted	51,755		51,277		51,627		51,217


			Level 1:			quoted (unadjusted) market prices in active markets for identical assets and liabilities. For ProAssurance, Level 1 inputs are generally quotes for securities actively traded in exchange or over-the-counter markets.


			Level 2:			market data obtained from sources independent of the reporting entity (observable inputs). For ProAssurance, Level 2 inputs generally include quoted prices in markets that are not active, quoted prices for similar assets or liabilities, and results from pricing models that use observable inputs such as interest rates and yield curves that are generally available at commonly quoted intervals.


			Level 3:			the reporting entity’s own assumptions about market participant assumptions based on the best information available in the circumstances (non-observable inputs). For ProAssurance, Level 3 inputs are used in situations where little or no Level 1 or 2 inputs are available or are inappropriate given the particular circumstances. Level 3 inputs include results from pricing models for which some or all of the inputs are not observable, discounted cash flow methodologies, single non-binding broker quotes and adjustments to externally quoted prices that are based on management judgment or estimation.


	September 30, 2025
	Fair Value Measurements Using						Total
(In thousands)	Level 1		Level 2		Level 3		Fair Value
Assets:
Fixed maturities, available-for-sale
U.S. Treasury obligations	$	—	$	248,450	$	—	$	248,450
U.S. Government-sponsored enterprise obligations	—		10,026		—		10,026
State and municipal bonds	—		451,391		—		451,391
Corporate debt, multiple observable inputs	—		1,666,329		—		1,666,329
Corporate debt, limited observable inputs	—		—		77,906		77,906

Residential mortgage-backed securities	—		552,081		—		552,081
Agency commercial mortgage-backed securities	—		5,230		—		5,230
Other commercial mortgage-backed securities	—		205,798				205,798
Other asset-backed securities	—		453,736		8,235		461,971
Fixed maturities, trading	—		12,390		—		12,390
Equity investments
Financial	9,532		2,358		—		11,890
Utilities/Energy	1,030		—		—		1,030

Industrial	—		—		4,526		4,526
Bond funds	81,215		—		—		81,215
All other	11,537		—		—		11,537
Short-term investments	223,597		67,748		—		291,345
Other investments	—		1,616		521		2,137
Other assets	—		734		—		734
Total assets categorized within the fair value hierarchy	$	326,911	$	3,677,887	$	91,188	4,095,986
Assets carried at NAV, which approximates fair value and which are not categorized within the fair value hierarchy, reported as a part of:

Investment in unconsolidated subsidiaries							220,532
Total assets at fair value							$	4,316,518

Liabilities:
Other liabilities	$	1,650	$	1,540	$	—	$	3,190
Total liabilities categorized within the fair value hierarchy	$	1,650	$	1,540	$	—	$	3,190


	December 31, 2024
	Fair Value Measurements Using						Total
(In thousands)	Level 1		Level 2		Level 3		Fair Value
Assets:
Fixed maturities, available-for-sale
U.S. Treasury obligations	$	—	$	243,903	$	—	$	243,903
U.S. Government-sponsored enterprise obligations	—		14,894		—		14,894
State and municipal bonds	—		446,601		—		446,601
Corporate debt, multiple observable inputs	—		1,646,713		—		1,646,713
Corporate debt, limited observable inputs	—		—		81,062		81,062

Residential mortgage-backed securities	—		478,799		—		478,799
Agency commercial mortgage-backed securities	—		6,727		—		6,727
Other commercial mortgage-backed securities	—		201,786		—		201,786
Other asset-backed securities	—		457,948		3,774		461,722
Fixed maturities, trading	—		53,157		—		53,157
Equity investments
Financial	9,006		2,310		273		11,589
Utilities/Energy	724		—		—		724

Industrial	—		—		5,233		5,233
Bond funds	101,243		—		—		101,243
All other	11,369		—		—		11,369
Short-term investments	185,492		69,430		—		254,922
Other investments	—		1,577		500		2,077
Other assets	—		6,094		—		6,094
Total assets categorized within the fair value hierarchy	$	307,834	$	3,629,939	$	90,842	4,028,615
Assets carried at NAV, which approximates fair value and which are not categorized within the fair value hierarchy, reported as a part of:

Investment in unconsolidated subsidiaries							226,269
Total assets at fair value							$	4,254,884

Liabilities:
Other liabilities	$	6,680	$	—	$	—	$	6,680
Total liabilities categorized within the fair value hierarchy	$	6,680	$	—	$	—	$	6,680


	September 30, 2025
	Level 3 Fair Value Measurements – Assets
(In thousands)	Corporate Debt		Asset-backed Securities		Equity Investments		Other Investments		Total
Balance, June 30, 2025	$	80,344	$	9,449	$	4,526	$	1,021	$	95,340
Total gains (losses) realized and unrealized:
Included in earnings, as a part of:
Net investment income (loss)	24		3		—		—		27

Net investment gains (losses)	—		—		(590)		—		(590)

Included in other comprehensive income (loss)	224		98		—		—		322
Purchases	2,734		3,500		590		—		6,824
Sales	(5,444)		(49)		—		(500)		(5,993)
Transfers in	901		—		—		—		901
Transfers out	(877)		(4,766)		—		—		(5,643)
Balance, September 30, 2025	$	77,906	$	8,235	$	4,526	$	521	$	91,188
Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets held at period-end	$	—	$	—	$	(590)	$	—	$	(590)


	September 30, 2025
	Level 3 Fair Value Measurements - Assets

(In thousands)	Corporate Debt		Asset-backed Securities		Equity Investments		Other Investments		Total Assets
Balance, December 31, 2024	$	81,062	$	3,774	$	5,506	$	500	$	90,842
Total gains (losses) realized and unrealized:
Included in earnings, as a part of:
Net investment income (loss)	24		3		—		—		27

Net investment gains (losses)	(1,727)		—		(1,570)		—		(3,297)

Included in other comprehensive income (loss)	692		69		—		—		761
Purchases	12,533		8,321		590		521		21,965

Sales	(9,831)		(316)		—		(500)		(10,647)
Transfers in	6,968		2,198		—		—		9,166
Transfers out	(11,815)		(5,814)		—		—		(17,629)
Balance, September 30, 2025	$	77,906	$	8,235	$	4,526	$	521	$	91,188
Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets held at period-end	$	—	$	—	$	(1,278)	$	—	$	(1,278)


	September 30, 2024
	Level 3 Fair Value Measurements – Assets
(In thousands)	Corporate Debt		Asset-backed Securities		Equity Investments		Other Investments		Total Assets
Balance, June 30, 2024	$	66,951	$	724	$	4,238	$	500	$	72,413
Total gains (losses) realized and unrealized:
Included in earnings, as a part of:
Net investment income	—		2		—		—		2

Net investment gains (losses)	—		—		(68)		—		(68)

Included in other comprehensive income (loss)	95		—		—		—		95
Purchases	5,133		1,998		319		—		7,450
Sales	(958)		—		—		—		(958)
Transfers in	3,587		—		—		—		3,587

Balance, September 30, 2024	$	74,808	$	2,724	$	4,489	$	500	$	82,521
Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets and liabilities held at period-end	$	—	$	—	$	(68)	$	—	$	(68)


	September 30, 2024
	Level 3 Fair Value Measurements
	Assets										Liabilities
(In thousands)	Corporate Debt		Asset-backed Securities		Equity Investments		Other Investments		Total Assets		Other Liabilities		Total Liabilities
Balance, December 31, 2023	$	82,377	$	4,414	$	5,237	$	5,126	$	97,154	$	(6,500)	$	(6,500)
Total gains (losses) realized and unrealized:
Included in earnings, as a part of:
Net investment income (loss)	—		2		—		—		2		—		—

Net investment gains (losses)	—		—		(1,067)		98		(969)		6,500		6,500

Included in other comprehensive income (loss)	(49)		(22)		—		—		(71)		—		—
Purchases	11,901		3,198		319		—		15,418		—		—
Sales	(2,497)		(217)		—		(252)		(2,966)		—		—
Transfers in	3,587		—		—		—		3,587		—		—
Transfers out	(20,511)		(4,651)		—		(4,472)		(29,634)		—		—
Balance, September 30, 2024	$	74,808	$	2,724	$	4,489	$	500	$	82,521	$	—	$	—
Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets and liabilities held at period-end	$	—	$	—	$	(1,067)	$	88	$	(979)	$	—	$	—

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	Unfunded Contractual Commitments	Fair Value
(In thousands)	September 30, 2025	September 30, 2025		December 31, 2024


Investment in unconsolidated subsidiaries:
Private debt funds (1)	$3,799	$	11,823	$	14,190

Long/short equity funds (2)	None	—		4,246
Non-public equity funds (3)	$30,413	104,488		111,441

Credit funds (4)	$55,793	52,696		45,134

Strategy focused funds (5)	$62,270	51,525		51,258

Total investments carried at NAV		$	220,532	$	226,269


	September 30, 2025
(In thousands)	Amortized Cost		Allowance for Expected Credit Losses		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Fixed maturities, available-for-sale
U.S. Treasury obligations	$	254,416	$	—	$	833	$	6,799	$	248,450
U.S. Government-sponsored enterprise obligations	10,361		—		7		342		10,026
State and municipal bonds	462,226		—		4,200		15,035		451,391
Corporate debt	1,793,841		3,513		15,344		61,437		1,744,235
Residential mortgage-backed securities	593,747		185		4,515		45,996		552,081
Agency commercial mortgage-backed securities	5,940		—		10		720		5,230
Other commercial mortgage-backed securities	212,742		62		881		7,763		205,798
Other asset-backed securities	465,001		271		3,976		6,735		461,971
	$	3,798,274	$	4,031	$	29,766	$	144,827	$	3,679,182


(In thousands)	Amortized Cost		Due in one year or less		Due after one year through five years		Due after five years through ten years		Due after ten years		Total Fair Value
Fixed maturities, available-for-sale
U.S. Treasury obligations	$	254,416	$	96,671	$	117,090	$	32,067	$	2,622	$	248,450
U.S. Government-sponsored enterprise obligations	10,361		1,032		6,265		756		1,973		10,026
State and municipal bonds	462,226		31,578		151,503		144,730		123,580		451,391
Corporate debt	1,793,841		185,911		867,201		544,896		146,227		1,744,235
Residential mortgage-backed securities	593,747										552,081
Agency commercial mortgage-backed securities	5,940										5,230
Other commercial mortgage-backed securities	212,742										205,798
Other asset-backed securities	465,001										461,971
	$	3,798,274									$	3,679,182


	September 30, 2025
	Total				Less than 12 months				12 months or longer
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(In thousands)	Value		Loss		Value		Loss		Value		Loss
Fixed maturities, available-for-sale
U.S. Treasury obligations	$	190,822	$	6,799	$	13,661	$	972	$	177,161	$	5,827
U.S. Government-sponsored enterprise obligations	8,996		342		—		—		8,996		342
State and municipal bonds	288,050		15,035		40,373		1,840		247,677		13,195
Corporate debt	1,069,619		61,437		154,904		10,057		914,715		51,380
Residential mortgage-backed securities	315,729		45,996		76,550		4,951		239,179		41,045
Agency commercial mortgage-backed securities	4,781		720		800		122		3,981		598
Other commercial mortgage-backed securities	124,738		7,763		25,528		325		99,210		7,438
Other asset-backed securities	129,095		6,735		36,326		1,179		92,769		5,556
	$	2,131,830	$	144,827	$	348,142	$	19,446	$	1,783,688	$	125,381


	Three Months Ended September 30, 2025
(In thousands)	Corporate Debt		Residential mortgage-backed securities		Other commercial mortgage-backed securities		Other asset-backed securities		Total
Balance, at July 1, 2025	$	2,250	$	188	$	62	$	274	$	2,774
Additional credit losses related to securities for which:

No allowance for credit losses has been previously recognized	1,263		—		—		—		1,263

Reductions related to:
Securities sold during the period	—		(3)		—		(3)		(6)



Balance, at September 30, 2025	$	3,513	$	185	$	62	$	271	$	4,031


	Nine Months Ended September 30, 2025
(In thousands)	Corporate Debt		Residential mortgage-backed securities		Other commercial mortgage-backed securities		Other asset-backed securities		Total
Balance, at December 31, 2024	$	2,608	$	197	$	406	$	188	$	3,399
Additional credit losses related to securities for which:
No allowance for credit losses has been previously recognized	1,263		—		62		91		1,416

An allowance for credit losses was recorded in a previous period	1,727		—		—		—		1,727
Reductions related to:
Securities sold during the period	(2,085)		(12)		(406)		(8)		(2,511)



Balance, at September 30, 2025	$	3,513	$	185	$	62	$	271	$	4,031


	Three Months Ended September 30, 2024
(In thousands)	Corporate Debt		Residential mortgage-backed securities		Other commercial mortgage-backed securities		Other asset-backed securities		Total
Balance, at July 1, 2024	$	1,210	$	203	$	—	$	189	$	1,602
Additional credit losses related to securities for which:
No allowance for credit losses has been previously recognized	1,398		—		406		—		1,804


Reductions related to:
Securities sold during the period	—		(2)		—		(1)		(3)



Balance, at September 30, 2024	$	2,608	$	201	$	406	$	188	$	3,403


	Nine Months Ended September 30, 2024
(In thousands)	Corporate Debt		Residential mortgage-backed securities		Other commercial mortgage-backed securities		Other asset-backed securities		Total
Balance, at December 31, 2023	$	—	$	211	$	151	$	193	$	555
Additional credit losses related to securities for which:
No allowance for credit losses has been previously recognized	2,138		—		406		—		2,544
An allowance for credit losses was recorded in a previous period	470		—		—		—		470

Reductions related to:
Securities sold during the period	—		(10)		(151)		(5)		(166)



Balance, at September 30, 2024	$	2,608	$	201	$	406	$	188	$	3,403


	Three Months Ended September 30				Nine Months Ended September 30
(In millions)	2025		2024		2025		2024
Proceeds from sales (exclusive of maturities and paydowns)	$	13.1	$	39.4	$	175.2	$	97.7
Purchases	$	188.6	$	186.5	$	664.2	$	650.6


	Three Months Ended September 30				Nine Months Ended September 30
(In thousands)	2025		2024		2025		2024
Fixed maturities	$	37,199	$	34,092	$	108,826	$	99,150
Equities	1,027		1,197		3,142		3,253
Short-term investments, including Other	3,325		3,167		8,381		9,718
BOLI	927		1,101		2,166		2,087
Investment fees and expenses	(2,036)		(2,285)		(6,189)		(6,481)
Net investment income	$	40,442	$	37,272	$	116,326	$	107,727