We are downgrading our recommendation on ProAssurance Corp. (PRA) from Neutral to Underperform, owing to the decline in net premiums and increased total expenses, which also resulted in the deterioration of the top line and the combined ratio.
In addition, third quarter earnings declined year over year, though in line with the Zacks Consensus Estimate. Though the company has significantly expanded its footprint with the recent acquisition of American Physicians Service Group, and deployed sufficient capital through share repurchases, we believe price competition, loss cost trends and regulatory challenges limit the desired upside in the sector.
While the benefits of geographic diversity and strong financial position are likely to impact over time, we believe the inherent threats of the company will weigh on the performance in the near term.
PROASSURANCE CP (PRA): Free Stock Analysis Report
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