Segment Information (Tables)

12 Months Ended

Dec. 31, 2021

Schedule of segment reporting information

The tabular information that follows shows the financial results of the Company's reportable segments reconciled to results reflected in the Consolidated Statements of Income and Comprehensive Income. ProAssurance does not consider goodwill or intangible asset impairments, a gain on bargain purchase or transaction-related costs for completed business combinations, including any related tax impacts, in assessing the financial performance of its operating and reportable segments, and thus are included in the reconciliation of segment results to consolidated results.

Financial results by segment were as follows:


	Year Ended December 31, 2021
(In thousands)	Specialty P&C		Workers' Compensation Insurance		Segregated Portfolio Cell Reinsurance		Lloyd's Syndicates		Corporate		Inter-segment Eliminations		Consolidated
Net premiums earned	$	695,008	$	164,600	$	63,688	$	48,372	$	—	$	—	$	971,668
Net investment income	—		—		814		1,961		67,747		—		70,522
Equity in earnings (loss) of unconsolidated subsidiaries	—		—		—		—		48,974		—		48,974
Net investment gains (losses)	—		—		4,080		249		19,981		—		24,310
Other income (expense)(1)	3,370		2,211		3		912		5,531		(3,091)		8,936
Net losses and loss adjustment expenses	(575,164)		(114,704)		(32,569)		(29,812)		—		—		(752,249)
Underwriting, policy acquisition and operating expenses(1)	(127,709)		(52,418)		(21,635)		(17,957)		(26,641)		3,091		(243,269)
SPC U.S. federal income tax expense(2)	—		—		(1,947)		—		—		—		(1,947)
SPC dividend (expense) income	—		—		(10,050)		—		—		—		(10,050)
Interest expense	—		—		—		—		(19,719)		—		(19,719)
Income tax benefit (expense)	—		—		—		—		(4,651)		—		(4,651)
Segment results	$	(4,495)	$	(311)	$	2,384	$	3,725	$	91,222	$	—	$	92,525
Reconciliation of segments to consolidated results:
Gain on bargain purchase													74,408
Transaction-related costs, net(3)													(22,809)


Net income (loss)													$	144,124
Significant non-cash items:
Gain on bargain purchase													$	74,408
Depreciation and amortization, net of accretion	$	9,915	$	3,583	$	1,475	$	66	$	22,208	$	—	$	37,247


	Year Ended December 31, 2020
(In thousands)	Specialty P&C		Workers' Compensation Insurance		Segregated Portfolio Cell Reinsurance		Lloyd's Syndicates		Corporate		Inter-segment Eliminations		Consolidated
Net premiums earned	$	477,365	$	171,772	$	66,352	$	77,226	$	—	$	—	$	792,715
Net investment income	—		—		1,084		4,128		66,786		—		71,998
Equity in earnings (loss) of unconsolidated subsidiaries	—		—		—		—		(11,921)		—		(11,921)
Net investment gains (losses)	—		—		3,085		988		11,605		—		15,678
Other income (expense)(1)	3,908		2,216		205		51		2,531		(2,441)		6,470

Net losses and loss adjustment expenses	(470,074)		(111,552)		(29,605)		(50,216)		—		—		(661,447)
Underwriting, policy acquisition and operating expenses(1)	(109,599)		(56,449)		(20,709)		(30,136)		(23,429)		2,441		(237,881)
SPC U.S. federal income tax expense(2)	—		—		(1,746)		—		—		—		(1,746)
SPC dividend (expense) income	—		—		(14,304)		—		—		—		(14,304)
Interest expense	—		—		—		—		(15,503)		—		(15,503)
Income tax benefit (expense)	—		—		—		29		41,300		—		41,329
Segment results	$	(98,400)	$	5,987	$	4,362	$	2,070	$	71,369	$	—	$	(14,612)
Reconciliation of segments to consolidated results:
Goodwill impairment													(161,115)
Net income (loss)													$	(175,727)
Significant non-cash items:
Goodwill impairment													$	161,115
Depreciation and amortization, net of accretion	$	7,747	$	3,690	$	676	$	(4)	$	9,266	$	—	$	21,375


	Year Ended December 31, 2019
(In thousands)	Specialty P&C		Workers' Compensation Insurance		Segregated Portfolio Cell Reinsurance		Lloyd's Syndicates		Corporate		Inter-segment Eliminations		Consolidated
Net premiums earned	$	499,058	$	189,240	$	78,563	$	80,671	$	—	$	—	$	847,532
Net investment income	—		—		1,578		4,551		87,140		—		93,269
Equity in earnings (loss) of unconsolidated subsidiaries	—		—		—		—		(10,061)		—		(10,061)
Net investment gains (losses)	—		—		4,020		768		55,086		—		59,874
Other income (expense)(1)	5,796		2,399		559		(573)		3,478		(2,439)		9,220

Net losses and loss adjustment expenses	(532,485)		(121,649)		(52,412)		(47,369)		—		—		(753,915)
Underwriting, policy acquisition and operating expenses(1)	(120,310)		(57,520)		(23,201)		(34,711)		(19,146)		2,439		(252,449)
SPC U.S. federal income tax expense(2)	—		—		(1,059)		—		—		—		(1,059)
SPC dividend (expense) income	—		—		(4,579)		—		—		—		(4,579)
Interest expense	—		—		—		—		(16,636)		—		(16,636)
Income tax benefit (expense)	—		—		—		—		29,808		—		29,808
Segment results	$	(147,941)	$	12,470	$	3,469	$	3,337	$	129,669	$	—	$	1,004
Net income (loss)													$	1,004
Significant non-cash items:
Depreciation and amortization, net of accretion	$	6,586	$	3,825	$	(41)	$	(7)	$	8,302	$	—	$	18,665
(1) Certain fees for services provided to the SPCs at Inova Re and Eastern Re are recorded as expenses within the Segregated Portfolio Cell Reinsurance segment and as other income within the Workers' Compensation Insurance segment. These fees are primarily SPC rental fees and are eliminated between segments in consolidation.
(2) Represents the provision for U.S. federal income taxes for SPCs at Inova Re, which have elected to be taxed as a U.S. corporation under Section 953(d) of the Internal Revenue Code. U.S. federal income taxes are included in the total SPC net results and are paid by the individual SPCs.
(3) Represents the transaction-related costs, after-tax, associated with the acquisition of NORCAL. Pre-tax transaction-related costs of $25.0 million were included as a component of consolidated operating expense and the associated income tax benefit of $2.2 million was included as a component of consolidated income tax benefit (expense) on the Consolidated Statements of Income and Comprehensive Income for year ended December 31, 2021.

Schedule of product and service revenue from external customers

The following table provides detailed information regarding ProAssurance's gross premiums earned by product as well as a reconciliation to net premiums earned. All gross premiums earned are from external customers except as noted. ProAssurance's insured risks are primarily within the U.S.


	Year Ended December 31
(In thousands)	2021		2020		2019
Specialty P&C Segment
Gross premiums earned:
HCPL	$	616,614	$	411,716	$	434,867
Small business unit	105,605		104,376		109,876
Medical technology liability	38,508		34,909		33,957
Other	684		821		2,096
Ceded premiums earned	(66,403)		(74,457)		(81,738)
Segment net premiums earned	695,008		477,365		499,058

Workers' Compensation Insurance Segment
Gross premiums earned:
Traditional business	175,459		184,204		203,195
Alternative market business	68,206		71,280		84,214
Ceded premiums earned	(79,065)		(83,712)		(98,169)
Segment net premiums earned	164,600		171,772		189,240

Segregated Portfolio Cell Reinsurance Segment
Gross premiums earned:
Workers' compensation (1)	65,023		68,518		81,765
HCPL (2)	7,336		6,594		6,059
Other	—		—		480
Ceded premiums earned	(8,671)		(8,760)		(9,741)
Segment net premiums earned	63,688		66,352		78,563

Lloyd's Syndicates Segment
Gross premiums earned:
Property and casualty (3)	60,590		98,990		101,222


Ceded premiums earned	(12,218)		(21,764)		(20,551)
Segment net premiums earned	48,372		77,226		80,671

Consolidated net premiums earned	$	971,668	$	792,715	$	847,532

(1) Premium for all periods is assumed from the Workers' Compensation Insurance segment.

(2) Premium for all periods is assumed from the Specialty P&C segment.

(3) Includes a nominal amount of premium assumed from the Specialty P&C segment for the year ended December 31, 2019.