
	December 31, 2022
(In thousands)	Amortized Cost		Allowance for Expected Credit Losses		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Fixed maturities, available-for-sale
U.S. Treasury obligations	$	243,999	$	—	$	8	$	22,399	$	221,608
U.S. Government-sponsored enterprise obligations	21,562		—		—		1,628		19,934
State and municipal bonds	483,584		—		177		44,311		439,450
Corporate debt	1,980,579		—		735		199,862		1,781,452
Residential mortgage-backed securities	450,870		229		555		61,656		389,540
Agency commercial mortgage-backed securities	10,576		—		—		872		9,704
Other commercial mortgage-backed securities	217,021		—		63		22,994		194,090
Other asset-backed securities	444,220		198		289		27,617		416,694
	$	3,852,411	$	427	$	1,827	$	381,339	$	3,472,472


	December 31, 2021
(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Fixed maturities, available-for-sale
U.S. Treasury obligations	$	239,765	$	1,166	$	2,424	$	238,507
U.S. Government-sponsored enterprise obligations	20,467		29		262		20,234
State and municipal bonds	511,750		9,620		2,174		519,196
Corporate debt	1,884,455		29,050		14,949		1,898,556
Residential mortgage-backed securities	455,438		4,254		5,751		453,941
Agency commercial mortgage-backed securities	13,909		294		62		14,141
Other commercial mortgage-backed securities	231,226		2,530		2,273		231,483
Other asset-backed securities	457,837		2,747		2,920		457,664
	$	3,814,847	$	49,690	$	30,815	$	3,833,722

The recorded cost basis and estimated fair value of available-for-sale fixed maturities at December 31, 2022, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.


(In thousands)	Amortized Cost		Due in one year or less		Due after one year through five years		Due after five years through ten years		Due after ten years		Total Fair Value
Fixed maturities, available-for-sale
U.S. Treasury obligations	$	243,999	$	23,523	$	139,958	$	56,909	$	1,218	$	221,608
U.S. Government-sponsored enterprise obligations	21,562		2,195		13,790		3,949		—		19,934
State and municipal bonds	483,584		37,427		144,161		151,294		106,568		439,450
Corporate debt	1,980,579		174,542		854,788		654,558		97,564		1,781,452
Residential mortgage-backed securities	450,870										389,540
Agency commercial mortgage-backed securities	10,576										9,704
Other commercial mortgage-backed securities	217,021										194,090
Other asset-backed securities	444,220										416,694
	$	3,852,411									$	3,472,472

Cash and securities with a carrying value of $51.6 million at December 31, 2022 were on deposit with various state insurance departments to meet regulatory requirements. ProAssurance also held securities with a carrying value of $31.3 million at December 31, 2022 that are pledged as collateral security for advances under the Company's borrowing relationships with FHLBs.

As a member of Lloyd's, ProAssurance is required to maintain capital at Lloyd's, referred to as FAL, to support underwriting by Syndicate 1729. At December 31, 2022, ProAssurance's FAL investments were comprised of available-for-sale fixed maturities with a fair value of $23.8 million and cash and cash equivalents of $1.0 million on deposit with Lloyd's in order to satisfy these FAL requirements. During the second quarter of 2022, ProAssurance received a return of approximately $5.5 million of cash from its FAL balances given Syndicate 6131 ceased underwriting on a quota share basis with Syndicate 1729 as Syndicate 6131's business is retained within Syndicate 1729 beginning with the 2022 underwriting year. The return of FAL during the second quarter of 2022 also related to the settlement of the Company's participation in the results of Syndicate 1729 and Syndicate 6131 for the 2019 underwriting year. Further, during the fourth quarter of 2022, ProAssurance received a return of approximately $5.6 million of cash from its FAL balances due to lower capital requirements for the 2023 underwriting year following Lloyd's of London's review of Syndicate 1729's 2023 business plan.


	December 31, 2022
	Total				Less than 12 months				12 months or longer
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(In thousands)	Value		Loss		Value		Loss		Value		Loss
Fixed maturities, available-for-sale
U.S. Treasury obligations	$	220,991	$	22,399	$	53,199	$	2,393	$	167,792	$	20,006
U.S. Government-sponsored enterprise obligations	19,934		1,628		8,082		663		11,852		965
State and municipal bonds	421,769		44,311		177,393		12,352		244,376		31,959
Corporate debt	1,708,529		199,862		687,947		42,977		1,020,582		156,885
Residential mortgage-backed securities	363,945		61,656		155,212		15,275		208,733		46,381
Agency commercial mortgage-backed securities	9,704		872		3,086		110		6,618		762
Other commercial mortgage-backed securities	192,359		22,994		53,270		4,087		139,089		18,907
Other asset-backed securities	396,452		27,617		162,192		7,050		234,260		20,567
	$	3,333,683	$	381,339	$	1,300,381	$	84,907	$	2,033,302	$	296,432


	December 31, 2021
	Total				Less than 12 months				12 months or longer
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(In thousands)	Value		Loss		Value		Loss		Value		Loss
Fixed maturities, available-for-sale
U.S. Treasury obligations	$	190,054	$	2,424	$	181,689	$	2,206	$	8,365	$	218
U.S. Government-sponsored enterprise obligations	16,287		262		16,287		262		—		—
State and municipal bonds	175,442		2,174		171,930		2,039		3,512		135
Corporate debt	945,196		14,949		866,731		11,828		78,465		3,121
Residential mortgage-backed securities	326,248		5,751		290,019		4,320		36,229		1,431
Agency commercial mortgage-backed securities	4,529		62		4,355		54		174		8
Other commercial mortgage-backed securities	151,827		2,273		145,467		1,884		6,360		389
Other asset-backed securities	278,915		2,920		271,463		2,796		7,452		124
	$	2,088,498	$	30,815	$	1,947,941	$	25,389	$	140,557	$	5,426

As of December 31, 2022, excluding U.S. Government or U.S. Government-sponsored enterprise obligations, there were 2,901 debt securities (74.4% of all available-for-sale fixed maturity securities held) in an unrealized loss position representing 1,433 issuers. The greatest and second greatest unrealized loss positions among those securities were approximately $5.7 million and $4.1 million, respectively. The securities were evaluated for impairment as of December 31, 2022.

As of December 31, 2021, excluding U.S. Government or U.S. Government-sponsored enterprise obligations, there were 1,766 debt securities (45.8% of all available-for-sale fixed maturity securities held) in an unrealized loss position representing 998 issuers. The greatest and second greatest unrealized loss positions among those securities were each approximately $0.4 million. The securities were evaluated for impairment as of December 31, 2021.

Each quarter, ProAssurance performs a detailed analysis for the purpose of assessing whether any of the securities it holds in an unrealized loss position has suffered an impairment due to credit or non-credit factors. A detailed discussion of the factors considered in the assessment is included in Note 1.

Fixed maturity securities held in an unrealized loss position at December 31, 2022, excluding asset-backed securities, have paid all scheduled contractual payments and are expected to continue. Expected future cash flows of asset-backed securities, excluding those issued by GNMA, FNMA and FHLMC, held in an unrealized loss position were estimated as part of the December 31, 2022 impairment evaluation using the most recently available six-month historical performance data for the collateral (loans) underlying the security or, if historical data was not available, sector based assumptions, and equaled or exceeded the current amortized cost basis of the security.


	Year Ended December 31, 2022
(In thousands)	Corporate Debt		Residential mortgage-backed securities		Other asset-backed securities		Total
Balance, at December 31, 2021	$	—	$	—	$	—	$	—
Additional credit losses related to securities for which:
No allowance for credit losses has been previously recognized	553		229		198		980


Reductions related to:

Securities for which there is an intent to sell or will more likely than not be sold before recovery of its amortized cost	(553)		—		—		(553)


Balance, at December 31, 2022	$	—	$	229	$	198	$	427

ProAssurance's equity investments are carried at fair value with changes in fair value recognized in income as a component of net investment gains (losses) during the period of change. Equity investments on the Consolidated Balance Sheets as of December 31, 2022 and 2021 primarily included bond funds and, to a lesser degree, stocks and investment funds.

ProAssurance's short-term investments, which have a maturity at purchase of one year or less, are primarily comprised of investments in U.S. treasury obligations, commercial paper and money market funds. Short-term investments are carried at fair value which approximates the cost of the securities due to their short-term nature.

ProAssurance holds BOLI policies that are carried at the current cash surrender value of the policies (original cost $42 million), which includes the BOLI policies acquired from NORCAL (original cost $10 million). All insured individuals were members of ProAssurance or NORCAL management at the time the policies were acquired. The primary purpose of the program is to offset future employee benefit expenses through earnings on the cash value of the policies. ProAssurance is the owner and beneficiary of these policies.


	Year Ended December 31
(In thousands)	2022		2021		2020
Fixed maturities	$	93,736	$	74,437	$	69,308
Equities	3,706		2,539		4,369
Short-term investments, including Other	5,681		1,969		2,683
BOLI	1,141		2,698		2,023
Investment fees and expenses	(8,292)		(11,121)		(6,385)
Net investment income	$	95,972	$	70,522	$	71,998


	December 31, 2022	Carrying Value
(In thousands)	Percentage Ownership	December 31, 2022		December 31, 2021

Qualified affordable housing project tax credit partnerships	See below	$	4,088	$	12,424

All other investments, primarily investment fund LPs/LLCs	See below	301,122		323,152
		$	305,210	$	335,576

Qualified affordable housing project tax credit partnership interests held by ProAssurance generate investment returns by providing tax benefits to fund investors in the form of tax credits and project operating losses. The carrying value of these investments reflects ProAssurance's total commitments (both funded and unfunded) to the partnerships, less any amortization. At December 31, 2022, ProAssurance did not have an ownership percentage greater than 20% in any tax credit partnership interests. At December 31, 2021, ProAssurance's ownership percentage relative to two of the tax credit partnership interests was almost 100%; these interests had a carrying value of $3.2 million at December 31, 2021. ProAssurance's ownership percentage relative to the remaining tax credit partnership interests is less than 20%; these interests had a carrying value of $4.1 million and $9.2 million at December 31, 2022 and 2021, respectively. Since ProAssurance has the ability to exert influence over the partnerships but does not control them, all are accounted for using the equity method. See further discussion of the entities in which ProAssurance holds passive interests in Note 14.

ProAssurance holds interests in investment fund LPs/LLCs and other equity method investments and LPs/LLCs which are not considered to be investment funds. ProAssurance's ownership percentage relative to three of the LPs/LLCs is greater than 25%, which is expected to be reduced as the funds mature and other investors participate in the funds; these investments had a carrying value of $36.0 million and $49.0 million at December 31, 2022 and 2021, respectively. ProAssurance's ownership percentage relative to the remaining investments and LPs/LLCs is less than 25%; these interests had a carrying value of $265.1 million and $274.2 million at December 31, 2022 and 2021, respectively. ProAssurance does not have the ability to exert control over any of these funds.

Equity in earnings (loss) of unconsolidated subsidiaries included losses from qualified affordable housing project tax credit partnerships and a historic tax credit partnership. Investment results recorded reflect ProAssurance's allocable portion of partnership operating results. Tax credits reduce income tax expense in the period they are utilized. The results recorded and tax credits recognized related to ProAssurance's tax credit partnership investments were as follows:


	Year Ended December 31
(In thousands)		2022		2021		2020
Qualified affordable housing project tax credit partnerships
Losses recorded		$	8,278	$	15,239	$	18,684
Tax credits recognized		$	4,805	$	13,160	$	17,465

Historic tax credit partnership*
Losses (gains) recorded		$	(1,212)	$	(182)	$	1,092
Tax credits recognized		$	—	$	—	$	412
*ProAssurance holds a historic tax credit partnership which was fully amortized in 2020. This partnership generated investment returns by providing benefits to partnership investors in the form of tax credits, tax deductible project operating losses and distributions resulting from positive cash flows. ProAssurance received a distribution associated with this investment during the second quarter of 2022 and the first quarter of 2021, as a result of positive cash flows from a completed project, which was recognized as an operating gain in each respective period.

The tax credits generated from the Company's tax credit partnership investments of $4.8 million, $13.2 million and $17.9 million for the years ended December 31, 2022, 2021 and 2020, respectively, were deferred and are expected to be utilized in future periods. Not included in the table above is $0.5 million of tax credits recaptured from the 2019 tax year during the year ended December 31, 2022 due to the carryback of the Company's estimated NOL for the year ended December 31, 2022 to the 2021 tax year. The recaptured tax credits were earned in 2019 but not utilized until 2021 due to NOL's generated in both 2019 and 2020. As of December 31, 2022, the Company had approximately $51.2 million of available tax credit carryforwards generated from its investments in tax credit partnerships which they expect to utilize in future periods (see further discussion in Note 6).

Tax credits provided by the underlying projects of the Company's historic tax credit partnership are typically available in the tax year in which the project is put into active service, whereas the tax credits provided by qualified affordable housing project tax credit partnerships are provided over approximately a ten year period.

As previously discussed, ProAssurance holds certain investments that are measured using the equity method of accounting, primarily investments in LPs/LLCs, which are carried as a part of investment in unconsolidated subsidiaries on the Consolidated Balance Sheets. As of December 31, 2022, the following equity method investees represent the largest funds on an absolute basis contributing to ProAssurance's equity in earnings (loss) of unconsolidated subsidiaries:

The following tables presents aggregated gross summarized financial information for the funds as of December 31, 2022, including the portion not attributable to ProAssurance, derived from the funds' financial statements which are prepared in accordance with GAAP. As the majority of ProAssurance's equity method investments report their results to the Company on a one quarter lag, the majority of the summarized financial information below is for the twelve months ended September 30, 2022 and 2021.


Income Statement Information
(In thousands)	Year Ended September 30
	2022		2021		2020
Net investment income (loss)	$	13,009	$	2,506	$	(16,557)
Net investment gains (losses)	47,824		219,089		655
Net change in unrealized appreciation (depreciation)	135,218		490,761		123,942
Operating Expenses	4,870		6,527		7,528
Net gain (loss)	$	191,181	$	705,829	$	100,512

Net gain (loss) attributable to ProAssurance(1)	$	(375)	$	10,171	$	(8,296)

(1) Represents ProAssurance's share of the funds' aggregate income or loss, which is included as a component of equity in earnings (loss) of unconsolidated subsidiaries in its Consolidated Statements of Income and Comprehensive Income for the year ended December 31, 2022 and 2021.


	Year Ended December 31
(In thousands)	2022		2021		2020
Total impairment losses:


Corporate debt	$	(1,331)	$	—	$	(1,745)


Asset-backed securities	(441)		—		—
Portion of impairment losses recognized in other comprehensive income before taxes:
Corporate debt	—		—		237
Asset-backed securities	14		—		—
Net impairment losses recognized in earnings	(1,758)		—		(1,508)
Gross realized gains, available-for-sale fixed maturities	1,740		14,311		13,855
Gross realized (losses), available-for-sale fixed maturities	(3,387)		(1,218)		(2,501)

Net realized gains (losses), trading fixed maturities	(155)		(20)		288
Net realized gains (losses), equity investments	(5,252)		7,337		13,192
Net realized gains (losses), other investments	(222)		8,660		3,883
Change in unrealized holding gains (losses), trading fixed maturities	(613)		(529)		501
Change in unrealized holding gains (losses), equity investments	(22,166)		(2,941)		(16,287)
Change in unrealized holding gains (losses), convertible securities, carried at fair value	(10,557)		(1,701)		3,850

Other(1)	9,213		411		405
Net investment gains (losses)	$	(33,157)	$	24,310	$	15,678
(1) Includes a gain of $9.0 million recognized during the fourth quarter of 2022 reflecting the change in the fair value of contingent consideration issued in connection with the NORCAL acquisition. See further discussion on the contingent consideration in Note 2 and Note 3.

For the year ended December 31, 2022, ProAssurance recognized credit-related impairment losses in earnings of $1.8 million and a nominal amount of non-credit impairment losses in OCI. The credit-related impairment losses recognized in 2022 related to a corporate bond in the consumer sector as well as certain mortgage-backed and other asset backed securities. For the year ended December 31, 2021, ProAssurance did not recognize any credit-related impairment losses in earnings or non-credit impairment losses in OCI. For the year ended December 31, 2020, ProAssurance recognized credit-related impairment losses in earnings of $1.5 million and nominal amount of non-credit impairment losses in OCI. The credit-related impairment losses recognized in 2020 primarily related to corporate bonds in the energy and consumer sectors. Additionally, 2020 included credit-related impairment losses related to four corporate bonds in various sectors, which were sold during 2020. The non-credit impairment losses recognized in 2020 related to three corporate bonds in the energy and consumer sectors.


	Year Ended December 31
(In thousands)	2022		2021		2020
Balance beginning of period	$	—	$	552	$	470
Additional credit losses recognized during the period, related to securities for which:
No impairment has been previously recognized	610		—		1,064
Impairment has been previously recognized	—		—		258
Reductions due to:
Securities sold during the period (realized)	—		(552)		(1,240)
Securities for which there is an intent to sell or will more likely than not be sold before recovery of amortized cost	(553)		—		—
Balance December 31	$	57	$	—	$	552