Specialty insurer ProAssurance Corporation is to review its strategic options regarding its Lloyd’s of London investment, following a disappointing performance by its Lloyd’s Syndicates segment in the fourth-quarter of 2018.
During its third-quarter 2018 conference call ProAssurance forecast losses of roughly $3.2 million within its Lloyd’s Syndicates segment. However, after receiving loss estimates related to hurricane Michael, the firm has announced an expected Q4 2018 net loss of between $9 million and $10.5 million within its Lloyd’s Syndicates segment.
ProAssurance estimates that its share of these net pre-tax losses will be approximately $6.8 million, net of reinstatement premiums. Typically, says ProAssurance, these losses would be included in its first-quarter 2019 results, but owing to the availability and materiality of these estimates, the firm selected to accelerate its loss reporting of these losses into its Q4 2018 results.
The company’s Chairman and Chief Executive Officer (CEO), Stan Starnes, said: “We are deeply disappointed in the performance of our investment at Lloyd’s and we will be reviewing all our strategic options regarding this investment in the coming months.”
Overall, for the fourth-quarter of 2018, ProAssurance expects to report a net loss of between $0.45 and $0.47 per basic and diluted share and positive Non-GAAP operating earnings of between $0.17 and $0.19 per diluted share.
The firm expects gross premiums written of between $210 million and $212 million, and net earned premiums of between $201 million and $203 million for the fourth-quarter.
Favourable loss development is expected to be between $24 million and $26 million, with a consolidated net loss ratio of between 76% and 77%. The firm’s consolidated combined ratio for the fourth-quarter of 2018 is expected to be between 105.5% and 106.5%.
