XML 31 R18.htm IDEA: XBRL DOCUMENT
v3.7.0.1

Segment Information | 3 Months Ended
--- | ---
Mar. 31, 2017
Segment Reporting [Abstract] |
Segment Information | Segment Information ProAssurance operates in four segments that are organized around the nature of the products and services provided: Specialty P&C, Workers' Compensation, Lloyd's Syndicate, and Corporate. A description of each segment follows. Specialty P&C is primarily focused on professional liability insurance and medical technology liability insurance. Professional liability insurance is primarily offered to healthcare providers and institutions and to attorneys and their firms. Medical technology liability insurance is offered to medical technology and life sciences companies that manufacture or distribute products including entities conducting human clinical trials. The Specialty P&C segment cedes certain premium to the Lloyd's Syndicate segment under a quota share agreement with Syndicate 1729. As discussed below, Syndicate 1729 operating results are reported on a quarter delay. For consistency purposes, results from this ceding arrangement, other than cash receipts or disbursements, have been reported within the Specialty P&C segment on the same one quarter delay. Workers' Compensation provides workers' compensation products primarily to employers with 1,000 or fewer employees. The segment also offers alternative market solutions whereby policies written are 100% ceded either to captive insurers unaffiliated with ProAssurance or to SPC s operated by a wholly owned subsidiary of ProAssurance. Each SPC is owned, fully or in part, by an agency, group or association. Operating results (underwriting profit or loss, plus investment results reported in the Corporate segment) of the SPC s are due to the owners of that cell. Lloyd's Syndicate includes operating results from ProAssurance's 58% participation in Lloyd's of London Syndicate 1729. Syndicate 1729 underwrites risks over a wide range of property and casualty insurance and reinsurance lines in both the U.S. and international markets. The results of this segment are reported on a quarter delay, except that investment results associated with investment assets solely allocated to Syndicate 1729 operations and certain U.S. paid administrative expenses are reported concurrently as that information is available on an earlier time frame. Corporate includes ProAssurance's investment operations, interest expense and U.S. income taxes, all of which are managed at the corporate level with the exception of investment assets solely allocated to Syndicate 1729 as discussed above. The segment also includes non-premium revenues generated outside of our insurance entities and corporate expenses. The accounting policies of the segments are the same as those described in Note 1 of the Notes to Consolidated Financial Statements in ProAssurance’s December 31, 2016 report on Form 10-K and Note 1 of the Notes to Condensed Consolidated Financial Statements. ProAssurance evaluates performance of its Specialty P&C and Workers' Compensation segments based on before tax underwriting profit or loss, which excludes investment performance. Performance of the Lloyd's Syndicate segment is evaluated based on underwriting profit or loss, plus investment results of investment assets solely allocated to Syndicate 1729 operations, net of U.K. income tax expense. Performance of the Corporate segment is evaluated based on the contribution made to consolidated after tax results. 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 and other assets are not managed at the segment level. Financial results by segment were as follows:
| Three Months Ended March 31, 2017
(In thousands) | Specialty P&C |  | Workers' Compensation |  | Lloyd's Syndicate |  | Corporate |  | Inter-segment Eliminations |  | Consolidated
Net premiums earned | $ | 113,058 |  |  | $ | 55,283 |  |  | $ | 14,562 |  |  | $ | — |  |  | $ | — |  |  | $ | 182,903 |
Net investment income | — |  |  | — |  |  | 372 |  |  | 22,814 |  |  | — |  |  | 23,186 |
Equity in earnings (loss) of unconsolidated subsidiaries | — |  |  | — |  |  | — |  |  | 1,808 |  |  | — |  |  | 1,808 |
Net realized gains (losses) | — |  |  | — |  |  | 27 |  |  | 13,253 |  |  | — |  |  | 13,280 |
Other income | 1,198 |  |  | 145 |  |  | 391 |  |  | 173 |  |  | (86 | ) |  | 1,821 |
Net losses and loss adjustment expenses | (74,994 | ) |  | (34,650 | ) |  | (9,507 | ) |  | — |  |  | — |  |  | (119,151 | )
Underwriting, policy acquisition and operating expenses | (25,977 | ) |  | (16,691 | ) |  | (6,211 | ) |  | (8,315 | ) |  | 86 |  |  | (57,108 | )
Segregated portfolio cells dividend (expense) income (1) | 28 |  |  | (1,174 | ) |  | — |  |  | (1,229 | ) |  | — |  |  | (2,375 | )
Interest expense | — |  |  | — |  |  | — |  |  | (4,133 | ) |  | — |  |  | (4,133 | )
Income tax benefit (expense) | — |  |  | — |  |  | 7 |  |  | 1,217 |  |  | — |  |  | 1,224 |
Segment operating results | $ | 13,313 |  |  | $ | 2,913 |  |  | $ | (359 | ) |  | $ | 25,588 |  |  | $ | — |  |  | $ | 41,455 |
Significant non-cash items: |  |  |  |  |  |  |  |  |  |  |
Depreciation and amortization, net of accretion | $ | 1,911 |  |  | $ | 837 |  |  | $ | (3 | ) |  | $ | 5,058 |  |  | $ | — |  |  | $ | 7,803 |
| Three Months Ended March 31, 2016
(In thousands) | Specialty P&C |  | Workers' Compensation |  | Lloyd's Syndicate |  | Corporate |  | Inter-segment Eliminations |  | Consolidated
Net premiums earned | $ | 110,755 |  |  | $ | 54,383 |  |  | $ | 12,441 |  |  | $ | — |  |  | $ | — |  |  | $ | 177,579 |
Net investment income | — |  |  | — |  |  | 315 |  |  | 25,125 |  |  | — |  |  | 25,440 |
Equity in earnings (loss) of unconsolidated subsidiaries | — |  |  | — |  |  | — |  |  | (3,634 | ) |  | — |  |  | (3,634 | )
Net realized gains (losses) | — |  |  | — |  |  | (5 | ) |  | (8,347 | ) |  | — |  |  | (8,352 | )
Other income | 1,276 |  |  | 471 |  |  | 252 |  |  | 458 |  |  | (103 | ) |  | 2,354 |
Net losses and loss adjustment expenses (2) | (71,174 | ) |  | (35,027 | ) |  | (6,189 | ) |  | — |  |  | 1,435 |  |  | (110,955 | )
Underwriting, policy acquisition and operating expenses (2) | (25,054 | ) |  | (17,829 | ) |  | (5,167 | ) |  | (7,507 | ) |  | (1,332 | ) |  | (56,889 | )
Segregated portfolio cells dividend (expense) income (1) | — |  |  | (713 | ) |  | — |  |  | (463 | ) |  | — |  |  | (1,176 | )
Interest expense | — |  |  | — |  |  | — |  |  | (3,686 | ) |  | — |  |  | (3,686 | )
Income tax benefit (expense) | — |  |  | — |  |  | (84 | ) |  | (1,280 | ) |  | — |  |  | (1,364 | )
Segment operating results | $ | 15,803 |  |  | $ | 1,285 |  |  | $ | 1,563 |  |  | $ | 666 |  |  | $ | — |  |  | $ | 19,317 |
Significant non-cash items: |  |  |  |  |  |  |  |  |  |  |
Depreciation and amortization, net of accretion | $ | 2,011 |  |  | $ | 1,404 |  |  | $ | 66 |  |  | $ | 5,149 |  |  | $ | — |  |  | $ | 8,630 |
(1) During the first quarter of 2017, ProAssurance began reporting in the Corporate segment the portion of the SPC dividend (expense) income that is attributable to the investment results of the SPCs, all of which are reported in the Corporate segment, to better align the expense with the related investment results of the SPCs. For comparative purposes, ProAssurance has reflected the SPC dividend expense for 2016 in the same manner.
(2) In the first quarter of 2016, the portion of the management fee that was allocated to ULAE was eliminated in consolidation. During the second quarter of 2016, ProAssurance discontinued the practice of eliminating in consolidation the portion of the management fee that was allocated to ULAE, thus there was no similar elimination in the first quarter of 2017.
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 March 31
(In thousands) | 2017 |  | 2016
Specialty P&C Segment |  |  |
Gross premiums earned: |  |  |
Healthcare professional liability | $ | 117,051 |  |  | $ | 113,749 |
Legal professional liability | 6,317 |  |  | 6,614 |
Medical technology liability | 8,312 |  |  | 8,550 |
Other | 102 |  |  | 268 |
Ceded premiums earned | (18,724 | ) |  | (18,426 | )
Segment net premiums earned | 113,058 |  |  | 110,755 |
Workers' Compensation Segment |  |  |
Gross premiums earned: |  |  |
Traditional business | 41,768 |  |  | 42,650 |
Alternative market business | 19,446 |  |  | 18,294 |
Ceded premiums earned | (5,931 | ) |  | (6,561 | )
Segment net premiums earned | 55,283 |  |  | 54,383 |
Lloyd's Syndicate Segment |  |  |
Gross premiums earned: |  |  |
Property and casualty* | 17,185 |  |  | 13,373 |
Ceded premiums earned | (2,623 | ) |  | (932 | )
Segment net premiums earned | 14,562 |  |  | 12,441 |
Consolidated Net premiums earned | $ | 182,903 |  |  | $ | 177,579 |
*Includes premium assumed from the Specialty P&C segment of $3.5 million for the three months ended March 31, 2017 and $3.6 million for the three months ended March 31, 2016.

X
- References No definition available. + Details
Name: | us-gaap_SegmentReportingAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8981-108599 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9038-108599 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 33 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8971-108599 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8595-108599 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8380-108599 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 35 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8984-108599 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9031-108599 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9054-108599 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8538-108599 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 29 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8864-108599 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8924-108599 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8906-108599 + Details
Name: | us-gaap_SegmentReportingDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration