ProAssurance Raised to Outperform - Analyst Blog

By
A A A

On Mar 5, 2013, we upgraded our recommendation on ProAssurance Corp. ( PRA ) to Outperform based on strong credit ratings, prudent capital management and inorganic growth.

Why the Upgrade?

Despite a soft cycle in the medical liability business, ProAssurance has significantly expanded its geographic footprint through successful acquisitions and integration of companies. The financial size and strength have helped this Zacks Rank #3 (Hold) stock to become an attractive acquirer. Furthermore, its commitment to local market needs and personal service differentiates the company from its competitors, both in organic growth and acquisition opportunities.


Prudent capital management is another key strength for ProAssurance, which is reflected in the low-risk balance sheet and healthy loss reserves. All of the subsidiaries of ProAssurance exceed the minimum risk-based capital (RBC) requirements specified by National Association of Insurance Commissioners (NAIC).

Further, the company deploys capital in an effective manner mainly through its stock buyback program and dividend payment.The company deployed $38.4 million on quarterly dividends in 2012, along with a special dividend of $154.1 million in Dec 2012. Moreover, the company authorized a 2:1 stock split in Dec 2012, which will double the total dividend payment in the future due to the twofold increase in outstanding shares.

Moreover, ProAssurance enjoys Insurer Financial Strength (IFS) rating of "A" from both A.M. Best and Fitch. The ratings reflect the company's high claims paying ability, financial strength and ability to meet its debt obligations.

Other Stocks to Consider

Apart from ProAssurance, other stocks worth considering in the property and casualty insurance business are XL Group plc ( XL ), Navigators Group Inc. ( NAVG ) and Cincinnati Financial Corp. ( CINF ). All these companies carry a Zacks Rank #1 (Strong Buy).



CINCINNATI FINL (CINF): Free Stock Analysis Report

NAVIGATORS GRP (NAVG): Free Stock Analysis Report

PROASSURANCE CP (PRA): Free Stock Analysis Report

XL GROUP PLC (XL): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: CINF , NAVG , PRA , RBC , XL

Zacks.com

Zacks.com

More from Zacks.com:

Related Videos

Stocks

Referenced

Most Active by Volume

100,376,898
  • $17.62 ▲ 0.51%
83,231,837
  • $25.62 ▲ 1.91%
75,739,329
  • $111.78 ▼ 0.77%
65,297,937
  • $36.37 ▼ 1.76%
59,053,093
  • $47.66 ▲ 0.29%
53,482,350
  • $2.59 ▼ 0.38%
51,504,284
  • $7.34 ▲ 2.37%
51,434,656
  • $8.14 ▲ 6.96%
As of 12/19/2014, 04:15 PM


Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com