
	September 30, 2023
(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	$	261,067	$	—	$	—	$	23,239	$	237,828
U.S. Government-sponsored enterprise obligations	20,354		—		—		1,483		18,871
State and municipal bonds	480,277		—		49		44,058		436,268
Corporate debt	1,864,148		—		598		200,768		1,663,978
Residential mortgage-backed securities	470,066		216		333		73,236		396,947
Agency commercial mortgage-backed securities	9,768		—		—		1,116		8,652
Other commercial mortgage-backed securities	210,104		151		25		24,169		185,809
Other asset-backed securities	426,450		193		243		19,541		406,959
	$	3,742,234	$	560	$	1,248	$	387,610	$	3,355,312


	December 31, 2022
(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	$	243,999	$	—	$	8	$	22,399	$	221,608
U.S. Government-sponsored enterprise obligations	21,562		—		—		1,628		19,934
State and municipal bonds	483,584		—		177		44,311		439,450
Corporate debt	1,980,579		—		735		199,862		1,781,452
Residential mortgage-backed securities	450,870		229		555		61,656		389,540
Agency commercial mortgage-backed securities	10,576		—		—		872		9,704
Other commercial mortgage-backed securities	217,021		—		63		22,994		194,090
Other asset-backed securities	444,220		198		289		27,617		416,694
	$	3,852,411	$	427	$	1,827	$	381,339	$	3,472,472

The recorded cost basis and estimated fair value of available-for-sale fixed maturities at September 30, 2023, 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	$	261,067	$	35,570	$	166,215	$	33,643	$	2,400	$	237,828
U.S. Government-sponsored enterprise obligations	20,354		5,186		13,199		486		—		18,871
State and municipal bonds	480,277		36,817		150,101		140,152		109,198		436,268
Corporate debt	1,864,148		216,641		830,290		534,892		82,155		1,663,978
Residential mortgage-backed securities	470,066										396,947
Agency commercial mortgage-backed securities	9,768										8,652
Other commercial mortgage-backed securities	210,104										185,809
Other asset-backed securities	426,450										406,959
	$	3,742,234									$	3,355,312

Cash and securities with a carrying value of $53.7 million at September 30, 2023 were on deposit with various state insurance departments to meet regulatory requirements. ProAssurance also held securities with a carrying value of $69.2 million at September 30, 2023 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 underwriting by Syndicate 1729. At September 30, 2023, ProAssurance's FAL investments were comprised of investment securities, primarily available-for-sale fixed maturities, with a fair value of $19.6 million on deposit with Lloyd's in order to satisfy these FAL requirements. During the second quarter of 2023, ProAssurance received a return of approximately $4.1 million of cash from its FAL balances related to the settlement of the Company's participation in the results of Syndicate 1729 and Syndicate 6121 for the 2020 underwriting year.


	September 30, 2023
	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	$	237,828	$	23,239	$	53,724	$	2,863	$	184,104	$	20,376
U.S. Government-sponsored enterprise obligations	18,871		1,483		4,311		352		14,560		1,131
State and municipal bonds	417,930		44,058		84,695		4,940		333,235		39,118
Corporate debt	1,600,097		200,768		186,646		12,441		1,413,451		188,327
Residential mortgage-backed securities	370,223		73,236		140,460		17,086		229,763		56,150
Agency commercial mortgage-backed securities	8,652		1,116		821		29		7,831		1,087
Other commercial mortgage-backed securities	183,434		24,169		20,378		1,836		163,056		22,333
Other asset-backed securities	384,747		19,541		82,866		1,319		301,881		18,222
	$	3,221,782	$	387,610	$	573,901	$	40,866	$	2,647,881	$	346,744


	December 31, 2022
	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	$	220,991	$	22,399	$	53,199	$	2,393	$	167,792	$	20,006
U.S. Government-sponsored enterprise obligations	19,934		1,628		8,082		663		11,852		965
State and municipal bonds	421,769		44,311		177,393		12,352		244,376		31,959
Corporate debt	1,708,529		199,862		687,947		42,977		1,020,582		156,885
Residential mortgage-backed securities	363,945		61,656		155,212		15,275		208,733		46,381
Agency commercial mortgage-backed securities	9,704		872		3,086		110		6,618		762
Other commercial mortgage-backed securities	192,359		22,994		53,270		4,087		139,089		18,907
Other asset-backed securities	396,452		27,617		162,192		7,050		234,260		20,567
	$	3,333,683	$	381,339	$	1,300,381	$	84,907	$	2,033,302	$	296,432

As of September 30, 2023, excluding U.S. Government or U.S. Government-sponsored enterprise obligations, there were 2,829 debt securities (73.3% of all available-for-sale fixed maturity securities held) in an unrealized loss position representing 1,396 issuers. The greatest and second greatest unrealized loss positions among those securities were approximately $6.0 million and $4.1 million, respectively. The securities were evaluated for impairment as of September 30, 2023.

As of December 31, 2022, excluding U.S. Government or U.S. Government-sponsored enterprise obligations, there were 2,901 debt securities (74.4% of all available-for-sale fixed maturity securities held) in an unrealized loss position representing 1,433 issuers. The greatest and second greatest unrealized loss positions among those securities were approximately $5.7 million and $4.1 million, respectively. The securities were evaluated for impairment as of December 31, 2022.

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, 2022 report on Form 10-K.

Fixed maturity securities held in an unrealized loss position at September 30, 2023, 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, 2023 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.


	Three Months Ended September 30, 2023
(In thousands)	Residential mortgage-backed securities		Other commercial mortgage-backed securities		Other asset-backed securities		Total
Balance, at July 1, 2023	$	223	$	—	$	196	$	419
Additional credit losses related to securities for which:
No allowance for credit losses has been previously recognized	—		151		—		151


Reductions related to:
Securities sold during the period	(7)		—		(3)		(10)



Balance, at September 30, 2023	$	216	$	151	$	193	$	560


	Nine Months Ended September 30, 2023
(In thousands)	Residential mortgage-backed securities		Other commercial mortgage-backed securities		Other asset-backed securities		Total
Balance, at December 31, 2022	$	229	$	—	$	198	$	427
Additional credit losses related to securities for which:
No allowance for credit losses has been previously recognized	—		151		—		151


Reductions related to:
Securities sold during the period	(13)		—		(5)		(18)



Balance, at September 30, 2023	$	216	$	151	$	193	$	560


	Three Months Ended September 30				Nine Months Ended September 30
(In thousands)	2023		2022		2023		2022
Fixed maturities	$	28,402	$	23,725	$	83,680	$	67,275
Equities	1,158		846		3,070		2,514
Short-term investments, including Other	4,473		1,812		11,857		2,965
BOLI	668		421		1,784		635
Investment fees and expenses	(1,947)		(2,059)		(5,677)		(6,257)
Net investment income	$	32,754	$	24,745	$	94,714	$	67,132

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, 2023 and December 31, 2022, ProAssurance did not have an ownership percentage greater than 20% in any tax credit partnership interests. ProAssurance's ownership percentage relative to the tax credit partnership interests is less than 20%; these interests had a carrying value of $0.8 million at September 30, 2023 and $4.1 million at December 31, 2022. 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 11.

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 four and three of the LPs/LLCs is greater than 25% at September 30, 2023 and December 31, 2022, respectively, which is likely to be reduced as the funds mature and other investors participate in the funds; these investments had a carrying value of $45.0 million at September 30, 2023 and $36.0 million at December 31, 2022. ProAssurance's ownership percentage relative to the remaining investments and LPs/LLCs is less than 25%; these interests had a carrying value of $251.5 million at September 30, 2023 and $265.1 million at December 31, 2022. ProAssurance does not have the ability to exert control over any of these funds.

Equity in earnings (loss) of unconsolidated subsidiaries included losses from qualified affordable housing project tax credit partnerships and a historic tax credit partnership. 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)	2023		2022		2023		2022
Qualified affordable housing project tax credit partnerships
Losses recorded	$	429	$	2,164	$	2,294	$	7,360
Tax credits recognized	$	401	$	1,201	$	473	$	3,604

Historic tax credit partnership*
Losses (gains) recorded	$	—	$	—	$	—	$	(961)

*ProAssurance holds a historic tax credit partnership which was fully amortized in 2020. This partnership generated investment returns by providing benefits to partnership investors in the form of tax credits, tax deductible project operating losses and distributions resulting from positive cash flows. ProAssurance received a distribution associated with this investment during the second quarter of 2022 as a result of positive cash flows from a completed project, which was recognized as an operating gain during the second quarter of 2022.

Due to the consolidated loss before income taxes recognized during the three and nine months ended September 30, 2023, the tax credits generated in 2023 from tax credit partnership investments of $0.4 million and $0.5 million, respectively, were deferred and are expected to be utilized in future periods. For the three and nine months ended September 30, 2022, the tax credits generated from the Company's tax credit partnership investments of $1.2 million and $3.6 million, respectively, were deferred and are expected to be utilized in future periods. Not included in the table above is $2.2 million of tax credits recaptured from the 2019 tax year during the nine months ended September 30, 2023 due to the carryback of the Company's estimated NOL for 2023 to the 2021 tax year. The recaptured tax credits were earned in 2019 but not utilized until 2021 due to NOL's generated in both 2019 and 2020. As of September 30, 2023, the Company had approximately $53.4 million of available tax credit carryforwards generated from its investments in tax credit partnerships which they expect to utilize in future periods.

Tax credits provided by the underlying projects of the Company's historic tax credit partnership are typically available in the tax year in which the project is put into active service, whereas the tax credits provided by qualified affordable housing project tax credit partnerships are provided over approximately a ten-year period.


	Three Months Ended September 30				Nine Months Ended September 30
(In thousands)	2023		2022		2023		2022
Total impairment losses:


Corporate debt	$	—	$	—	$	(2,984)	$	(972)

Asset-backed securities	(141)		—		(133)		—
Portion of impairment losses recognized in other comprehensive income before taxes:
Corporate debt	—		—		—		419


Net impairment losses recognized in earnings	(141)		—		(3,117)		(553)
Gross realized gains, available-for-sale fixed maturities	254		142		793		1,594
Gross realized (losses), available-for-sale fixed maturities	(285)		(57)		(1,509)		(2,146)

Net realized gains (losses), trading fixed maturities	5		(30)		(101)		(127)
Net realized gains (losses), equity investments	154		—		254		(5,346)
Net realized gains (losses), other investments	(683)		209		(2,570)		99
Change in unrealized holding gains (losses), trading fixed maturities	(71)		(100)		81		(881)
Change in unrealized holding gains (losses), equity investments	(4,578)		(6,655)		(1,962)		(24,063)
Change in unrealized holding gains (losses), convertible securities, carried at fair value	(588)		(1,443)		3,473		(14,502)

Other(1)	3,231		(328)		7,814		273
Net investment gains (losses)	$	(2,702)	$	(8,262)	$	3,156	$	(45,652)
(1) Includes gains of $1.5 million and $4.5 million recognized during the 2023 three- and nine-month periods, respectively, reflecting the change in the fair value of contingent consideration issued in connection with the NORCAL acquisition. See further discussion on the contingent consideration in Note 2 and discussion on the Company's accounting policy in Note 1 in its December 31, 2022 report on Form 10-K.

For the three and nine months ended September 30, 2023, ProAssurance recognized a nominal amount and $3.1 million of credit-related impairment losses in earnings, respectively. The credit-related impairment losses recognized during the three and nine months ended September 30, 2023 related to a mortgage-backed security and, for the 2023 nine-month period, two corporate bonds in the financial sector. The Company did not recognize any non-credit impairment losses in OCI during the three and nine months ended September 30, 2023. ProAssurance did not recognize any credit-related impairment losses in earnings or non-credit impairment losses in OCI during the three months ended September 30, 2022. For the nine months ended September 30, 2022, ProAssurance recognized credit-related impairment losses in earnings of $0.6 million and non-credit impairment losses in OCI of $0.4 million. The credit-related impairment losses and non-credit related impairment losses recognized during the nine months ended September 30, 2022 related to a corporate bond in the consumer sector.


	Three Months Ended September 30				Nine Months Ended September 30
(In thousands)	2023		2022		2023		2022
Balance beginning of period	$	57	$	553	$	57	$	—
Additional credit losses recognized during the period, related to securities for which:
No impairment has been previously recognized	—		—		—		553





Balance June 30	$	57	$	553	$	57	$	553