| 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. | |
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| 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.
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