Shareholders' Equity

12 Months Ended

Dec. 31, 2023

Equity [Abstract]

Shareholders' Equity

Shareholders’ Equity

At December 31, 2023 and 2022, ProAssurance had 100 million shares of authorized common stock and 50 million shares of authorized preferred stock. The Board has the authority to determine provisions for the issuance of preferred shares, including the number of shares to be issued, the designations, powers, preferences and rights, and the qualifications, limitations or restrictions of such shares.

The following is a summary of changes in common shares issued and outstanding during the years ended December 31, 2023, 2022 and 2021:

(In thousands)	2023	2022	2021
Issued and outstanding shares - January 1	53,964	53,984	53,893
Repurchase of shares, at cost of $50.5 million and $3.3 million for 2023 and 2022, respectively	(3,143)	(139)	—
Shares issued due to vesting of share-based compensation awards	61	66	46
Other shares issued for compensation*	88	53	45
Issued and outstanding shares - December 31	50,970	53,964	53,984
* Shares issued were valued at fair value (the market price of a ProAssurance common share on the date of issue).

As of December 31, 2023, approximately 1.2 million of authorized common shares were reserved for the issuance of currently outstanding restricted share and performance share unit awards under the incentive compensation plans described in Note 13.

ProAssurance declared cash dividends during 2023, 2022 and 2021 as follows:

	Cash Dividends Declared, per Share
	2023		2022		2021
First Quarter	$	0.05	$	0.05	$	0.05
Second Quarter	$	—	$	0.05	$	0.05
Third Quarter	$	—	$	0.05	$	0.05
Fourth Quarter	$	—	$	0.05	$	0.05

Quarterly dividends were paid in the month following the quarter in which they were declared. Dividends declared totaled $2.7 million during 2023 and 2022 and 2021 each totaled $10.8 million.

ProAssurance's ability to pay dividends to its shareholders is limited by its holding company structure, to the extent of the net assets held by its insurance subsidiaries, as discussed in Note 18. Otherwise, there are no other regulatory restrictions on ProAssurance's retained earnings or net income that materially impact its ability to pay dividends. Based on shareholders' equity at December 31, 2023, total equity of $404.8 million was free of debt covenant restrictions regarding the payment of dividends. However, any decision to pay future cash dividends is subject to the Board’s final determination after a comprehensive review of financial performance, future expectations and other factors deemed relevant by the Board. In light of the price range in which the Company's stock traded in the second quarter of 2023, the Board decided to suspend payment of a quarterly cash dividend. Instead, the Company used available capital to repurchase shares pursuant to the existing share repurchase authorization.

As of December 31, 2023, Board authorizations for the repurchase of common shares or the retirement of outstanding debt of $55.9 million remained available for use. The timing and quantity of purchases depends upon market conditions and changes in ProAssurance's capital requirements and is subject to limitations that may be imposed on such purchases by applicable securities laws and regulations as well as the rules of the NYSE.

Other Comprehensive Income (Loss) and Accumulated Other Comprehensive Income (Loss)

The following tables provide a detailed breakout of the components of AOCI and the amounts reclassified from AOCI to net income (loss). The tax effects of all amounts in the tables below, except for an immaterial amount of unrealized gains and losses on available-for-sale securities held at the Company's U.K. subsidiary, were computed using the enacted U.S. federal corporate tax rate of 21%. OCI included a deferred tax expense of $25.1 million for the year ended December 31, 2023 and a deferred tax benefit of $85.2 million and $15.0 million for the years ended December 31, 2022 and 2021, respectively.

The changes in the balance of each component of AOCI for the years ended December 31, 2023, 2022 and 2021 were as follows:

(In thousands)	Unrealized Investment Gains (Losses)		Cash Flow Hedging Gains (Losses) (1)		Non-credit Impairments		Unrecognized Change in Defined Benefit Plan Liabilities		Accumulated Other Comprehensive Income (Loss)
Balance, December 31, 2022	$	(297,142)	$	—	$	(11)	$	(1,454)	$	(298,607)
OCI, before reclassifications, net of tax	87,624		3,062		—		277		90,963
Amounts reclassified from AOCI, net of tax	3,191		(36)		—		—		3,155
Net OCI, current period	90,815		3,026		—		277		94,118
Balance, December 31, 2023	$	(206,327)	$	3,026	$	(11)	$	(1,177)	$	(204,489)

(In thousands)	Unrealized Investment Gains (Losses)		Non-credit Impairments		Unrecognized Change in Defined Benefit Plan Liabilities(2)		Accumulated Other Comprehensive Income (Loss)
Balance, December 31, 2021	$	14,929	$	—	$	1,355	$	16,284
OCI, before reclassifications, net of tax	(314,822)		(342)		(2,746)		(317,910)
Amounts reclassified from AOCI, net of tax	2,751		331		(63)		3,019
Net OCI, current period	(312,071)		(11)		(2,809)		(314,891)
Balance, December 31, 2022	$	(297,142)	$	(11)	$	(1,454)	$	(298,607)

(In thousands)	Unrealized Investment Gains (Losses)		Non-credit Impairments		Unrecognized Change in Defined Benefit Plan Liabilities(2)(3)		Accumulated Other Comprehensive Income (Loss)
Balance, December 31, 2020	$	75,388	$	(57)	$	(104)	$	75,227
OCI, before reclassifications, net of tax	(50,242)		—		1,406		(48,836)
Amounts reclassified from AOCI, net of tax	(10,217)		57		53		(10,107)
Net OCI, current period	(60,459)		57		1,459		(58,943)
Balance, December 31, 2021	$	14,929	$	—	$	1,355	$	16,284
(1) ProAssurance entered into two forward-starting interest rate swap agreements ("Interest Rate Swaps") on May 2, 2023, each of which are designated and qualify as a cash flow hedge. See Note 11 for additional information on the Interest Rate Swaps.
(2) The Company sponsors NORCAL's frozen defined benefit plan and recorded a nominal net actuarial gain, net of tax, included in AOCI as of December 31, 2022 as compared to a net actuarial gain of $0.2 million, net of tax, included in AOCI as of December 31, 2021.
(3) The Company terminated Eastern's defined benefit plan, effective September 30, 2021, resulting in a settlement of the liabilities under the plan and the net loss previously reflected in AOCI being recognized in earnings for the year ended December 31, 2021.