This presentation contains Forward Looking Statements and other information designed to convey
our projections and expectations regarding future results. There are a number of factors which
could cause our actual results to vary materially from those projected in this presentation. The
principal risk factors that may cause these differences are described in various documents we file
with the Securities and Exchange Commission, such as our Current Reports on Form 8-K, and our
regular reports on Forms 10-Q and 10-K, particularly in “Item 1A, Risk Factors.” Please review
this presentation in conjunction with a thorough reading and understanding of these risk factors.
We especially identify statements concerning our recently-announced transactions involving
Medmarc Insurance group and Independent Nevada Doctors Insurance Exchange as forward
looking statements and direct your attention to our news releases issued on June 27, 2012 and our
Current Report on Form 8K, issued on June 28, 2012 for a discussion of risk factors pertaining to
these transactions and subsequent integration into ProAssurance
This presentation contains Non-GAAP measures, and we may reference Non-GAAP measures in
our remarks and discussions. A reconciliation of these measures to GAAP measures is available in
our latest quarterly news release, which is available in the Investor Relations section of our website,
www.ProAssurance.com, and in the related Current Reports on Form 8K disclosing that release.
FORWARD LOOKING STATEMENTS
1
NON-GAAP MEASURES
 
 
 
Capital Management Announcement
  Two-for-one stock split effective
 December 27, 2012
  Record date is December 17, 2012
  POST-SPLIT dividend payments
  Special Dividend: $2.50/share
  $154 million to shareholders
  Regular Dividend: $0.25/share
  Accelerated from Q1 2013
  Annualized yield of 2.2%
 based on 12/4/12 closing price
2
 
 
 
Transaction Update
3
  Medmarc policyholders
 approved the transaction
 on December 4, 2012
  Expected closing effective
 January 1, 2013
  Medmarc is a leader writer
 of liability insurance for
 medical technology and life
 sciences
  Transaction closed
 November 30, 2012
  IND is the leading
 medical professional
 liability writer in
 Nevada
 
 
 
ProAssurance General Update
We are the only pure-play, publicly-traded
healthcare professional liability (HCPL)
insurance company in America.
 
 
 
ProAssurance Corporate Profile
  Specialty liability insurance writer
  Primarily Healthcare Professional Liability (HCPL)
  Only pure play public company writing predominately
 HCPL
  Market Cap: ~$2.8 billion
  Shareholders’ Equity: $2.3 billion
  Total Assets: $5.0 billion
  Rated “A” by Fitch and A. M. Best
5
 
 
 
ProAssurance Corporate Profile
  Successfully adding business across the risk spectrum as the
 delivery of healthcare changes
  Distribution is Independent Agent (61%) and Direct (39%)
  Direct in Alabama, Florida and in all states for Podiatric business
  Dual distribution in DC, Texas and parts of Missouri
Q3 2012 Policyholders: ~66,250
2012 YTD Gross Written Premium: $429 mln
Nine Months Ended
September 30, 2012
 
 
 
ProAssurance Geographic Profile
  Broad geographic diversification
  Locally-based decision-making differentiates ProAssurance by
 addressing each state’s unique medical/legal challenges
7
ProAssurance Footprint
Corporate Headquarters
Corporate Headquarters
Claims Offices
Claims Offices
(Birmingham)
2011 Market Share: Top Five
2011 Market Share: Top Five
2011 Market Share: Six-Ten
2011 Market Share: Six-Ten
Nine Months Ended
September 30, 2012
 
 
 
Success Throughout the Insurance Cycle
8
Historical Book Value Per Share
Historical Stock Price
to 11/30/12
Inception to 9/30/12
CAGR: 16%
Cumulative:1985%
10 Year Summary (2002-2011)
CAGR: 16%
Cumulative: 342%
Charts do not reflect 2:1 stock split and dividends announced 12/5/12
 
 
 
Our Commitment to Treated Fairly
  Unwavering dedication to the defense of
 non-meritorious lawsuits
  Allows our insureds the right to an unfettered defense of
 their claims where permitted by law
  Steadfast dedication to in-depth underwriting and
 adequate pricing
  An unsurpassed level of customer service
  Unquestioned financial strength consistently
 delivering value for insureds and shareholders
9
 
 
 
Today’s Healthcare Professional Liability Market
ProAssurance delivers an unparalleled level of
service and financial stability that truly
differentiates our coverage and our Company in an
evolving, competitive market
 
 
 
HCPL Stands Apart in Insurance
  HCPL claims may not be filed for years after an
 incident and may take years to resolve: Long-tail
  Personal lines are short tail
  Introduces long periods of uncertainty
  Loss trends may change expected severity from time of
 initial pricing
  Can be mitigated by the use of the claims-made policy form
  Can provide a false sense of security for start-ups and
 companies seeking to aggregate market share based on price
  Float can be meaningful
  HCPL claims are almost always lawsuits
  High cost to defend, even if you win
11
 
 
 
The HCPL Market Today
  Prolonged period of “benign profitability”
  Premiums levels remain well above levels of 2000
  Significant policyholder retention by all companies
 despite fierce competition
  No large commercial carriers have entered the market
 in a meaningful manner
  Significant barriers to entry in underwriting and claims
 handling
  Psychological barriers exist—failures in the past
  No catastrophe exposure
12
 
 
 
The HCPL Market Today
13
 
 
 
The HCPL Market Today
  Changes in healthcare delivery are changing the
 underlying dynamics
  Physicians are combining into larger groups
  Physician practices are being brought into hospitals through
 purchase or affiliation
  Hospitals are combining into large networks requiring
 greater insurance expertise and greater financial security
  Larger companies with geographical reach and
 financial strength will have an advantage in attracting
 new business and continuing to consolidate
14
 
 
 
The HCPL Market Today
  Market remains fragmented even after two
 decades of consolidation
  More than 100 writers
  Largest market share is <8%
  100 companies have <1%
15
 
 
 
ProAssurance’s Standing in the Market
  ProAssurance is the largest independent
 publicly traded writer of HCPL insurance
  Fourth largest overall writer
16
DPW: SNL Data 2011
 
 
 
The Evolution of Healthcare and the HCPL Market
Our successful experience and deep expertise
uniquely qualify ProAssurance to insure the
widest range of healthcare risks
 
 
 
Healthcare Reform
  No meaningful change after the election
  Known: More customers for us
  May accelerate the growth of hospital-owned practices and
 consolidation into larger groups
  Provides an opportunity for us due to our geographic reach,
 long-term experience in hospitals and our financial strength
  We have enhanced our ability to write new classes of
 business through acquisitions
  May hasten the need for consolidation of smaller insurers
  Unknown: Effect on the medical/legal environment
  Increased patient frustration with the system
  Possibility of more unexpected outcomes
18
 
 
 
ProAssurance’s Evolving Strategy
  Shaped by a healthcare landscape that will
 change—with or without federal healthcare
 reform
  Enhancing our commitment to individual
 providers and small groups
  Expanding our hospital capabilities and
 commitment
  Building on two decades of hospital experience
19
 
 
 
ProAssurance’s Evolving Strategy
  Leverage our reach, expertise and financial
 strength with larger accounts
  Largest non-profit healthcare
 system in the US
  Now in Michigan, Florida,
 Illinois, Indiana and Texas
  Insuring Ascension-affiliated
 physicians through coordinated,
 jointly insured programs
  Financial involvement of both entities creates incentive to reduce risk
20
*www.ascensionhealth.org/index.php?option=com_locations&view=locations&Itemid=148
Ascension Health’s Ministry Locations*
 
 
 
ProAssurance’s Evolving Strategy
  Joint physician/hospital insurance product:
 ProControlsm
  Addresses the unique risk tolerance and claims-
 handling expectation of each insured
  Physicians largely seek claims defense to protect their reputation
  Hospitals/facilities seek to protect their reputation in different ways
  Hospitals can set their risk tolerance with a full retention level,
 a consultative level and a full risk transfer level
  Pricing varies with risk and financial levels
  Broad interest in the market with several policies in
 force
21
 
 
 
ProAssurance’s Evolving Strategy
  Ongoing interest in alternative risk and self-
 insurance mechanisms
  Captive insurance and sophisticated risk sharing
 programs
  Risk Retention Groups for specific specialties or
 regions
22
 
 
 
ProAssurance’s Successful M&A Strategy
  Consolidation will continue and will remain episodic
  Fewer significant targets
  Remaining companies of size are in important strategic areas
  We prefer “health care centric” but will consider closely related
 liability lines
  Legal/regulatory environment must be favorable
  Not all M&A opportunities should be pursued
  We do not “bet the company” on any transaction
23
Soft Market
Hard Market
M & A
de novo
Expansion
Internal
Growth
All avenues
open
because of
pricing
power
M & A is
preferable
because of
pricing
pressure
M & A and the Insurance Cycle
 
 
 
ProAssurance’s Successful M&A History
24
Original
Companies
  Purchased Company
  Demutualization
OHIC
HOSPITALS ONLY
2
1
1
1
1
1
1
1
1
3
4
4
1
4
  Renewal Rights
  Assumed Business
Proposed
2
2
†
2
3
1
3
3
1
SERTA
Expected Close 1/1/13
Expected Close 11/30/12
 
 
 
ProAssurance Operational Review
ProAssurance delivers an unparalleled level of
service and financial stability that truly
differentiates our coverage and our Company in an
evolving, competitive market
 
 
 
Underwriting for Profitability Not Market Share
  Underwriting process driven by individual risk
 selection and assessment of loss history, areas
 of practice, and location
  Rates contemplate specific ROE expectations
  Frequent rate/loss reviews ensure adequate prices
  Rate filings consider the results of the past five to
 seven years to ensure a single year does not unduly
 influence results
  Stringent underwriting standards maintain rate
 structure and enhance profitability
26
 
 
 
ProAssurance Business Outlook
  We ARE writing new business that we believe
 will meet our profitability goals
  Major competitors continue to be largely
 disciplined in pricing
27
 
 
 
Key State Rate Comparison
Annual Premium for a $1M / $3M Policy
Filed or Approved at 1/01/12
28
 
 
 
Calendar Year Combined Ratio: ProAssurance Consistently Outperforms in MPL
ProAssurance Outperforms the Industry
29
Five Years: ProAssurance Average: 64.1% / Industry Average: 82.5%
Ten Years: ProAssurance Average: 84.4% / Industry Average: 99.5%
All Years: ProAssurance Average: 91.3% / Industry Average: 108.6%
Source: A.M. Best Aggregates and Averages, Medical Malpractice Lines of Business
ProAssurance’s 2011
Combined Ratio was
the lowest among all
U.S. P&C Insurers
 
 
 
ProAssurance Pricing History
  Peak pricing was in 2006
  Improved frequency trends are reflected in recent rate declines
  Improvement in frequency has outweighed the steady, manageable rise in severity
  Loss trends have improved in states with and without tort reforms
  Rate changes (up or down) through 2012 will likely be low-to-mid single digits
MD/DO Rate Change History
PICA excluded to facilitate accurate comparisons over time
 
 
 
ProAssurance Retention Remains High
  Continued underwriting vigilance is being used today
 to ensure future success
  Market share is important, but NOT as important as
 profitability
31
 
 
 
Consistent Approach to Reserves
  Consistent reserving practices provide protection
 against a loss trend reversal and capital erosion
Net Favorable Reserve Development
Net Reserve per Open MPL Claim1
1 Statutory basis; Loss & LAE
 Acquired company data included at end of acquiring year
 
 
 
Understanding Recent Loss Trends
  Frequency stable after
 historic declines
  Lawyers are the gatekeepers
  Must weigh the cost of a trial vs.
 chances of success
  Likelihood of success is affected
 by many factors
  Societal perceptions of lawsuits
 against physicians
  Effects of the overall tort reform
 debate and headlines across the
 country
  Reforms enacted in some states
  Better quality of care reduces the
 number of medical misadventures
33
  Severity uptrend remains
 steady at 3%-4%
  Closely tied to inflation
  Primarily medical cost inflation
  Jury sentiment in reaction to
 headlines has moderated, but
 not eliminated, runaway
 verdicts in recent years
  Tort Reforms have limited
 non-economic damages in a
 number of states
 
 
 
New Claims Opened Each Year
Claims Trends Remain Favorable
  Fewer cases to try following significant decline in frequency
  Severity trends steady and manageable
  No observed effect from the economic downturn
  Trends are much the same in states with or without Tort Reform
34
ProAssurance Claims Tried to a Verdict
 
 
 
Differentiate Through Claims Defense
  We leverage our financial strength to gives our insureds the opportunity for
 an uncompromising defense of their claim
  Differentiates our product
  Provides long-term financial and marketing advantages
  Retains business and deters future lawsuits
  Increasingly important as claims data becomes public
  Malpractice outcomes now public in 26 states
ProAssurance: 78% No Paid Losses
Industry: 72% No Paid Losses
Source: Preliminary PIAA 2011
 Claim Trend Analysis,
 ProAssurance Excluded
Five Year Average
2007-2011
Source: ProAssurance,
 as reported to
 PIAA
 
 
 
The Ohio Example: 2005 - 2010 Data
  Comprehensive, reliable data provided by the Ohio Department of Insurance
  Broad range of competitors and business approaches
36
www.insurance.ohio.gov/Legal/Reports/Documents/2010ClosedClaimReport.pdf
More Claims Closed With No Indemnity
More Claims Defended in Court
2x Lower Average Indemnity Payment per Closed Claim
 
 
 
The Bottom Line Benefits of Strong Defense
  Our ability and willingness to defend claims allows us
 to achieve better results
37
Source: Statutory Basis, A.M. Best Aggregates & Averages
 Some totals may not agree due to rounding
ProAssurance vs. Industry
Average Loss Ratio (2007-2011)
Legal Payments as
a Percentage of
Total Loss Ratio
Loss Payments as
a Percentage of
Total Loss Ratio
64.3%
44.2%
58.9%
42.0%
41.6%
76.0%
36.8%
ProAssurance Stand Alone
Loss Ratio (2006-2011)
Calendar Year
24.7%
79%
68%
52%
58%
56%
81%
19%
21%
32%
48%
42%
44%
 
 
 
Malpractice Made Public
  Malpractice judgments/settlements now
 disclosed in 26 states
  Next: Public access to
 the National Practitioner
 Data Bank (NPDB)?
  Disciplinary actions
 now disclosed in
 all states
Board / Discipline
Board / Discipline / Med-Mal
Source: Federation of State Medical Boards National Clearinghouse and
 ProAssurance research
38
 
 
 
The Residual Cost of a Plaintiff Verdict
  Financial effects
  Higher MPL premiums
  May affect quality scoring under new payment regimes
  Credentialing implications
  Disclosure required when applying for licensing, privileges
 and treatment panels throughout their medical career
  Reputational damage
  May affect referrals
  Online disclosure can affect acquisition of new patients
  Emotional stress before, during and after
  Influences future treatment behavior and patient relationships
39
 
 
 
ProAssurance Performs
Delivering meaningful value for our shareholders
 
 
 
Committed to Effective Capital Management
  Balancing future needs with current market reality
  Regular dividend to be $1.00/share/year post 2:1 split
  ~2.2% yield based on 12/4/12 closing price
  Q1 2013 dividend accelerated to 2012
  Payable December 27, 2012
  Special Dividend of $2.50 per post-split share
  Payable December 27, 2012
  Prudent share repurchase program
  $321 million spent to repurchase
 6.1 million shares since 2005
  Enhancing shareholder value by
 repurchasing shares at prices
 that build Book Value
41
Share Repurchase History
 
 
 
Capital Growth: 2007-2012 YTD
42
in $000’s except
total equity (000,000’s)
* Includes economic cost of holding treasury shares
 
 
 
Q3 2012 Financial Highlights
43
 
Quarter Ended,
Six Months Ended,
 
9/30/2012
9./30/2011
9/30/2012
9/30/2011
Gross Premiums Written
 $
 156,547
 $
 174,680
 $
 429,223
 $
 450,795
Net Premiums Earned
$ 127,125
 $
 134,627
$ 395,050
 $
 403,766
Net Investment Income
$ 33,910
 $
 34,116
$ 101,912
 $
 106,573
Net Income (Includes Investment Losses)
 $
 60,106
 $
 43,705
 $
 174,204
 $
 146,494
Operating Income
 $
 52,946
 $
 48,366
 $
 160,630
 $
 147,007
Net Income per Diluted Share
 $ 1.94
 $ 1.42
 $ 5.64
 $ 4.75
Operating Income per Diluted Share
 $ 1.71
 $ 1.57
 $ 5.20
 $ 4.77
Does not reflect 2:1 stock split and dividends announced 12/5/12
 
 
 
Inside ProAssurance’s Balance Sheet
44
 
 
 
Inside ProAssurance’s Income Statement
45
 
 
 
Steady Return in an Unfavorable Environment
  Long-term ROE target: 12% -14%
 
 
 
  Book Value per Share captures our focus on long-term
 excellence
  Increased every year we have been public
Focused on Book Value
47
Inception to 9/30/12
CAGR: 16%
Cumulative:1985%
10 Year Summary (2002 -2011)
CAGR: 16%
Cumulative: 342%
Historical Book Value Per Share
Does not reflect 2:1 stock split and dividends announced 12/5/12
 
 
 
Book Value per Share History
Does not reflect 2:1 stock split and dividends announced 12/5/12
 
 
 
Driving Share Prices Higher
49
Historical Share Price
Inception to 11/30/2012
CAGR: 15%
Cumulative: 1684%
10 Year Summary (2002 -2011)
CAGR: 14%
Cumulative: 280%
Does not reflect 2:1 stock split and dividends announced 12/5/12
 
 
 
Driven to Excel / Focused on Shareholder Value
  Maintaining profitability
  Sustaining book value growth
  Producing sustainable shareholder value
  Focusing on long-term—ready for the market turn
Current Prices Continue to Offer a Compelling Buying Opportunity
Current Price to Q3 2012 Book: 1.2x Average Since Inception: 1.4x
Does not reflect 2:1 stock split and dividends announced 12/5/12
 
 
 
ProAssurance Transaction Discussion
Medmarc will broaden our product offerings and capabilities
in protecting the delivery of healthcare
Independent Nevada Doctors Insurance Exchange (IND)
will make ProAssurance the leading
medical professional liability writer in Nevada
 
 
 
Transaction Update
52
  A leading products
 liability writer in
 medical technology
 and life sciences
  Meaningful legal
 professional liability
 book
  Merger into
 ProAssurance
 solidifies IND’s
 position as the
 leading medical
 professional liability
 writer in Nevada
 
 
 
ProForma Premiums / Policyholders
2011 Actual PRA GPW: $566 million
2011 ProForma GPW: $619 million
2011 Actual Policyholders: ~71,500
2011 ProForma Policyholders: ~75,500
ProForma: ProAssurance + Medmarc + IND
 
 
 
IND Details
  Founded in 2006 by
 Nevada physicians
  Proven history
  Gained market leadership without competing on price
  Solid customer service philosophy mirrors
 ProAssurance
  ProAssurance and IND will combine offices in
 Las Vegas
  Transaction value not material to ProAssurance
54
 
 
 
IND Metrics
Pro Forma Nevada Market Share
ProAssurance + IND
$21.8 mil
NORCAL Mutual
$10.8 mil
Nevada Mutual
$10.5 mil
Premier Physicians
$7.2 mil
Fairfax Financial
$6.6 mil
Total Market
$85.6 mil
2011 Direct Written Premium
55
 
12/31/2011
12/31/2010
12/31/2009
Total Assets
  $
 51.8
  $
 50.6
  $
 47.2
Loss & LAE Reserves
  $
 22.8
  $
 25.6
  $
 25.5
Surplus (Equity)
  $
 19.7
  $
 16.4
  $
 13.7
Balance Sheet Highlights (STAT data in millions)
 
2011
2010
2009
Combined Ratio
57.0%
81.9%
94.2%
Combined Ratio (STAT Data)
Source: IND
Full statutory financial information:
www.ind-insurance.com/documents-and-downloads
 
12/31/2011
12/31/2010
12/31/2009
Gross Premiums Written
  $
 12.1
  $
 12.6
  $
 11.5
Net Income
  $
 3.9
  $
 2.4
  $
 1.3
2009-2011 Income Statement Highlights (STAT data in millions)
2011 Actual Direct Written Premium
IND
$12.1 mil
NORCAL Mutual
$10.8 mil
Nevada Mutual
$10.5 mil
ProAssurance
$9.7 mil
Premier Physicians
$7.2 mil
 
2011
2010
2009
Policyholders
603
565
520
Policyholders at each year-end
Source; SNL Financial, Total MPL Premium for Nevada
 
 
 
56
  Recognized leader in Nevada
  Conservative operating philosophy
  Physician-founded
  Corporate culture values high levels of customer
 service
  Strong brand recognition
  Strong surplus position relative to business written
  Proven, profitability
IND Strengths
  Experienced management team has committed to
 ProAssurance
  Deepens market share in a state with proven
 profitability
  Increased recognition as a brand leader
Advantages ProAssurance Gains from IND
ProAssurance Answers Challenges for IND
  Additional balance sheet strength
  ProAssurance will extend its “A” (Excellent) rating to
 IND
  Ability to address emerging needs of new account
 types:
  Large groups
  Multi-state groups
  Hospitals, clinic, health systems
  Seamless integration into ProAssurance reinsurance
 program will address issues surrounding the cost of
 reinsurance
 
 
 
Medmarc Update
  Regulatory approval granted
  Approved by policyholders
 on December 4th
  Expected closing effective January 1, 2013
57
 
 
 
Medmarc Details
  Founded in 1979 by the
 medical technology and
 life science industry
  Proven legal professional liability book
  Management will remain in place at corporate
 offices in Virginia
  Transaction value: $154 million in cash
   $146.2 direct payments to eligible members
   $7.5 million in future premium credits
58
 
 
 
Medmarc Metrics
Top Five States by
Direct Written Premium (2011)
California
$5.8 mil (14%)
Florida
$5.3 mil (13%)
Texas
$4.4 mil (10%)
Massachusetts
$3.8 mil (6%)
New Jersey
$2.0 mil (5%)
59
 
3/31/2012
12/31/2011
12/31/2010
12/31/2009
Total Assets
 $ 319.9
 $
 325.2
 $ 335.5
 $ 339.1
Loss & LAE Reserves
 $ 139.6
 $
 146.8
 $ 165.0
 $ 179.6
Total Liabilities
 $ 160.2
 $
 171.5
 $ 193.2
 $ 211.7
Surplus (Equity)
 $ 159.8
 $
 153.7
 $ 142.3
 $ 127.4
Tangible Book Value
 $ 159.8
 $
 153.7
 $ 142.1
 $ 126.8
Balance Sheet Highlights (STAT Data in millions)
 
12/31/2011
12/31/2010
12/31/2009
Gross Premiums Written
 $
 40.6
 $ 56.6
 $ 74.4
Net Premiums Written
 $
 30.0
 $ 40.6
 $ 42.1
Net Investment Income
 $
 11.6
 $ 12.0
 $ 13.4
Pre-Tax Income
 $
 15.2
 $ 10.1
 $ 12.2
Net Income
 $
 11.5
 $ 10.6
 $  9.5
2009-2011 Income Statement Highlights (STAT Data in millions)
 
12/31/2011
12/31/2010
12/31/2009
Loss Ratio
42.1%
71.0%
71.0%
Expense Ratio
51.5%
36.2%
35.5%
Combined Ratio
93.6%
107.2%
106.5%
Operating Ratio
58.4%
79.4%
77.8%
2009-2011 Ratios (STAT Data)
Data Sources: Medmarc Insurance Group, SNL Financial, A. M. Best
Full statutory financial information:
www.medmarc.com/About-Us/Pages/Statutory-Statements.aspx
2011 Policyholder Breakdown
MedTech / LfSci
958
Legal Professional
2,535
 
 
 
60
  Experienced board of directors and management team
  Strong surplus position relative to business written
  Profitable operations
  Conservative business philosophy
  Strategic relationship with AdvaMed
  Leading medical technology trade association
  Valuable life sciences brand developed over 32-year
 history:
  Relationships with over 1,000 leading medical
 technology companies
  Relationships with more than 380 brokers who control
 the life sciences business
  National defense attorney network comprising 340
 attorneys/firms domestically and internationally
  Recognized Web-based thought leadership
  16-year strategic alliance with The Hartford to insure
 other exposures for insureds
  Established lawyers’ professional liability program
Medmarc Strengths
ProAssurance Answers Challenges for Medmarc
  ProAssurance balance sheet strength will ensure
 Medmarc’s financial credibility
  Will allow Medmarc to again offer competitive
 limits
  ProAssurance will extend its “A” (Excellent) rating to
 Medmarc to reassure brokers
  Financial strength and higher rating may allow
 Medmarc to recapture business it lost due to tighter
 self-imposed underwriting guidelines
  Combined organization will have greater standing with
 reinsurers
 
 
 
Medmarc Transaction Analysis
61
  Buying at a discount to tangible book value
  Will increase ProAssurance book value per share
  Experienced management team has committed to
 ProAssurance
  ProAssurance adds
  Broader product offerings and capabilities in
 protecting the delivery of healthcare
  Expertise in medically-focused product liability
  A recognizable brand
  Premium growth at a reasonable price
  Strengthens ties with shared brokers and creates new
 relationships with desirable brokers
  Adds another strategic alliance as we gain name
 recognition outside legacy MPL business
  Adds significant scale to our lawyers’ professional
 liability program
  Little or no overlap in key LPL states
Advantages ProAssurance Gains from Medmarc
 
 
 
Medmarc Profitability Drives Surplus Growth
  Surplus at highest level in company history
62
 
 
 
  Significantly reduced exposure to accounts with sales greater
 than $100 million (2011)
Recent Events at Medmarc
63
 
 
 
Investment Portfolio Detail
ProAssurance remains conservatively
invested, to ensure our ability to keep our
long-term promise of insurance protection
 
 
 
ProAssurance: Investment Profile
65
$4.1 Billion Overall Portfolio
$3.6 Billion Fixed Income Portfolio
  Average duration: 3.8 years
  Average tax-equivalent Income yield: 4.5%
  Investment grade: 94%
  Weighted average: AA-
9/30/12
  Key portfolio actions in Q3 2012
  Added dividend-paying equities
  Added to high yield investments
  $89.2 million tax credit portfolio not reflected in
 investment income—provides approximately
 $10.5 million in tax credits and $8 million in
 deductions in 2012.
  CUSIP-level portfolio disclosure on our website:
 www.proassurance.com/investorrelations/supplemental.aspx
 
 
 
ProAssurance Portfolio Detail: Asset Backed
66
9/30/12
Subject to Rounding
Asset Backed: $599 Million
Weighted Average Rating: “AA+”
Breakdown of Agency MBS/CMBS Holdings
Key CMBS Details Provided on Following Page
Sub-Prime: $7.3 mil Market Value (AFS)
 $0.8 mil net unrealized loss
 
 
 
ProAssurance Portfolio Detail: Non-Agency CMBS
 $76.7 million Fair Value in non-agency CMBS
  Book Value: $70.3 million (2% of fixed income portfolio)
 We have experienced no losses on our CMBS positions
67
9/30/12
 
 
 
ProAssurance Portfolio Detail: Municipals
68
Municipals: $1.2 Billion / Average Rating is AA
Investment policy has always required
 investment grade rating prior to applying the
 effect of insurance
Weighted Average Rating: AA
9/30/12
 
 
 
ProAssurance Portfolio Detail: Equities & Other
69
Equities & Other: $336 Million
9/30/12
 
 
 
ProAssurance Portfolio Detail: Corporate
70
Corporates: $1.4 Billion
Weighted Average Rating: A-
9/30/12
 
 
 
ProAssurance Portfolio Detail: Various
  Rated A1/P1 or better
  Money Markets:
  Moody’s: Aaa
  S&P: AAA
 Weighted average rating
  Moody’s: AA3
  S&P: AA-
  A. M. Best: A+
Treasury / GSE: $281 Million
Short Term: $168 Million
BOLI: $52 Million
9/30/12
 
 
 
Additional Financial Data
 
 
 
Management is Experienced & Invested
  Effective senior management remains in place—14 years average tenure
  Average ProAssurance tenure through the VP level is 16 years, with an average of 26 years
 industry experience
  Management and employees are invested, owning ~4% of ProAssurance stock
73
W. Stancil Starnes, JD
Chairman & Chief Executive Officer
Company Tenure: 5 Years
Prior MPL Experience: 29 Years
Total Industry & Related Experience: 34 Years
Formerly in the private practice of law in MPL defense and
complex corporate litigation.
Victor T. Adamo, JD, CPCU
Vice-Chairman
Company Tenure: 27 Years
Prior MPL Experience: 5 Years
Total Industry & Related Experience: 32Years
Formerly in the private practice of corporate law. President of
Professionals Group, prior to formation of ProAssurance.
Ross E. Taubman, DPM
President of PICA
Company Tenure: 1 Year
Prior MPL Experience: -
Total Industry & Related Experience: 27 Years
Formerly in the private practice of podiatry . Leader in
organized podiatric medicine; former president and Trustee of
the American Podiatric Medical Association.
Jeffrey L. Bowlby, ARM
Sr. Vice-President & Chief Marketing Office
Company Tenure: 14 Years
Prior MPL Experience: -
Total Industry & Related Experience: 28 Years
Career-long experience in insurance sales and marketing,
most recently as SVP for Marketing with Meadowbrook.
Howard H. Friedman, ACAS
Sr. Vice-President & Chief Underwriting Officer
Company Tenure: 16 Years
Prior MPL Experience: 16 Years
Total Industry & Related Experience: 32 Years
Career-long experience in MPL company operations
and management. Former ProAssurance CFO.
Jeffrey P. Lisenby, JD
Sr. Vice-President, General Counsel & Secretary
Company Tenure: 12 Years
Prior MPL Experience: -
Total Industry & Related Experience: 12 Years
Formerly in the private practice of law.
Duncan Y. Manley
Vice-President, Operations and Information Systems
Company Tenure: 12 Years
Prior MPL Experience: 7 Years
Total Industry & Related Experience: 19 Years
Career-long experience in MPL company operations as an
executive and consultant.
Frank B. O’Neil
Sr. Vice-President & Chief Communications Officer
Company Tenure: 25 Years
Prior MPL Experience: -
Total Industry & Related Experience: 25 Years
Formerly a television news executive and anchor.
Edward L. Rand, Jr., CPA
Sr. Vice-President & Chief Financial Officer
Company Tenure: 8 Years
Prior MPL Experience: -
Total Industry & Related Experience: 20 Years
Career-long experience in insurance finance and accounting.
Most recently Chief Accounting Officer for Partner Re.
Darryl K. Thomas, JD
Sr. Vice-President & Chief Claims Officer
Company Tenure: 18 Years
Prior MPL Experience: 10 Years
Total Industry & Related Experience: 28 Years
Career-long experience in MPL claims management.
 
Hayes V. Whiteside, MD, FACS
Sr. Vice-President & Chief Medical Officer
Company Tenure: 9 Years
Prior MPL Experience: -
Total Industry & Related Experience: 29 Years
Formerly in the private practice of Urology.
Adam P. Wilczek
Sr. Vice-President & Chief Operating Officer of PICA
Company Tenure: 16 Years
Prior MPL Experience: 20 Years
Total Industry & Related Experience: 36 Years
Former executive with Medical Inter-Insurance Exchange
(MIIX) and Chubb.
 
 
 
  Prepared for an improving market
Conservative Use of Debt / Low Leverage
  No debt as of September 20, 2012
74
Debt to Equity
No Debt Prior to 2001
Strong Capital Position
 *
  
 Annualized 2012 premium
 for presentation purposes
 only. Specifically disclaimed
 as a projection of premiums
 
 
 
  The choice: chase yield or extend duration
  We are maintaining duration, looking for
 opportunities
  Pricing discipline becomes even more
 critical in a low interest rate environment
  Lack of investment yield may be a hard
 market catalyst
Return on Equity and Investment Returns
75
Assumes a 1:1 premium to surplus ratio for physicians
professional liability claims-made coverages
Combined Ratio Required to
Generate a 13% Return on Equity
Long-Term ROE Target is 13%
The Yield Trap
Revised to reflect yields at 9/30/12
 
 
 
Long-Term Financial Strength Sets Us Apart
 Ensuring the strength of our balance sheet is our top financial priority
  Financial strength differentiates us in the market
  The claims defense philosophy that differentiates us in the market leverages our
 financial strength
76
Shareholders’ Equity
87% Increase Since 12/31/07
Total Assets
 
 
 
Net Investment Income
Net Premiums Written
($ in millions. Excludes discontinued operations)
Net Income
Operating Income1
77
1  Excludes the after-tax effects of net realized gains or losses, and, in 2012, the effect of
 $714,000 in confidential settlements that do not reflect normal operating results
YTD = Nine months ended September 30th each period