) stated that A.M. Best reiterated Financial Strength Rating
("FSR") at 'A' of ProAssurance Group, while upgrading the outlook
ProAssurance Group comprises of ProAssurance Casualty,
ProAssurance Indemnity and ProAssurance Specialty.
The credit rating agency reiterated FSR at 'A' (Excellent) for
Podiatry Insurance Company of America ("PICA") and 'A-' for
ProAssurance National Casualty and PACO Assurance Company
("PACO"). The outlook for PACO is upgraded to stable but the
agency affirmed the stable outlook for PICA and ProAssurance
The rating reflects ProAssurance's dominant market position,
strong capital, solid business profile and continued favorable
operational results. The credit rating agency also noted that the
company continues to generate strong underwriting results on the
back of traditional reserving practices, regulated standards and
the ability to mitigate claims prudently.
We believe, the company's strong ratings scores will help retain
investor confidence and augment its business going forward.
ProAssurance reported first-quarter operating earnings per share
of $1.56, striding ahead of the Zacks Consensus Estimate of $1.41
and the year-ago quarter earnings of $1.46.
Improved earnings in the quarter were aided by higher revenues,
which were partially offset by lower net investment results.
The Zacks Consensus Estimate for the second quarter and full
year 2012 is currently pegged at $1.53 and $7.57 respectively. This
reflects a year-over-year decline of 12.1% and 16.3%.
Though the intense price and product competition, weak rate
environment, loss cost trends and regulatory challenges limit the
desired upside in the sector, we believe the benefits of geographic
diversity, aggressive claims defense, stable ratings, improving ROE
and strong financial position are likely to have a positive impact
on the company over time.
We retain our Outperform recommendation on ProAssurance. The
quantitative Zacks #2 Rank (short term Buy rating) for the company
indicates slight upward boost on the stock over the near term.
Headquartered in Birmingham, Alabama, ProAssurance Corporation
operates as a holding company for property and casualty insurance
companies. It competes with
Berkshire Hathaway Inc.
BERKSHIRE HTH-A (BRK.A): Free Stock Analysis
PROASSURANCE CP (PRA): Free Stock Analysis
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