读者寄语: 不管是您想投资美股, 还是想投资港股， 保持好自己的心态是最重要的。特别在美股、港股市场拥有一套成熟的金融市场，市场鼓励长期持有，而不是短期的投机炒作。选择一个好的公司, 耐心的等待, 做时间的朋友。如果您想咨询美股开户、港股开户相关的问题, 或者您对美股、港股感兴趣可以添加微信交流: andyhu006
ProAssurance Corporation (NYSE:PRA) Q2 2019 Earnings Conference Call August 8, 2019 10:00 AM ET
Ken McEwen - Investor Relations Manager
Ned Rand - President & Chief Executive Officer
Dana Hendricks - Chief Financial Officer
Mike Boguski - President, Specialty Property Casualty Lines
Kevin Shook - President, Workers' Compensation Operations
- Ken McEwen - 投资者关系经理
- Ned Rand - 总裁兼首席执行官
- Dana Hendricks - 首席财务官
- Mike Boguski - 特种财产伤亡专线总裁
- Kevin Shook - 工人赔偿运营总裁
Greg Peters - Raymond James
Christopher Campbell - KBW
Michael Ramirez - SunTrust
- 格雷格彼得斯 - 雷蒙德詹姆斯
- 克里斯托弗坎贝尔 - KBW
- 迈克尔拉米雷斯 - SunTrust
Good morning everyone. Welcome to ProAssurance's Conference Call to discuss the Company's Results for the Second Quarter of 2019. These results were reported in a news release issued on August 7, 2019. Included in that release were cautionary statements about the significant risks, uncertainties and other factors that are out of the company's control and could affect ProAssurance's business and alter expected results. Please, review those statements.
Management expects to make statements on this call dealing with projections, estimates and expectations and explicitly identifies these as forward-looking statements within the meaning of the U.S. Federal Securities Laws and subject to applicable Safe Harbor protection.
The content of this call is accurate only on August 8, 2019 and except as required by law or regulation, ProAssurance will not undertake and expressly disclaims any obligation to update or alter information disclosed as part of these forward-looking statements. The management team of ProAssurance also expects to reference non-GAAP items during today's call. The company's recent news release provides a reconciliation of these non-GAAP numbers to their GAAP counterparts.
Now, as I turn the call over to Mr. Ken McEwen, I would like to remind you that this call is being recorded, and there will be a time for questions after the conclusion of prepared remarks. Mr. McEwen, please go ahead.
Thank you, Nicole. On our call today are President and CEO, Ned Rand; Chief Financial Officer, Dana Hendricks; Mike Boguski, President of our Specialty Property Casualty Lines; and Kevin Shook, President of our Workers' Compensation Operations.
Ned, will you please start us off?
妮可，谢谢你。 今天我们的电话会议是总裁兼首席执行官，Ned Rand; 首席财务官Dana Hendricks; Mike Boguski，我们的特种财产伤亡线总裁; 和我们工人赔偿业务总裁Kevin Shook。
Thank you, Ken. As this is my first earnings call as CEO, I want to begin by thanking Stan for his innumerable contributions to ProAssurance during his 12 years of leadership. I look forward to continuing to work with him in his new role as Executive Chairman.
I would also like to welcome and congratulate Mike Boguski and Kevin Shook in their new roles on our Executive Leadership team, which became effective shortly after our first quarter call. I'm excited for the insight and experience each of you brings to the table, and look forward to what we will accomplish together.
There are a couple of one-time items that can make quarter-over-quarter comparisons tricky this quarter. And these are laid out in detail in our earnings release and our 10-Q. Dana and Kevin will provide some additional details. Behind the noise created by these items, I see enough positives to think that this was a good quarter. We were able to secure rate increases across our Specialty Property Casualty segment with only a modest impact to our retention. This is a result of our dedication to disciplined underwriting, making sure we write business and assume risk only if we can get appropriate premium through the exposure that's presented. To do otherwise would compromise the security of our customers our employees and our shareholders.
Net favorable reserve development declined as a result of our focus on the risk of increasing severity trends in the broader healthcare professional liability market. I'll again emphasize that we're not seeing these trends in our paid data. However, the greater number of large verdicts, increasing plaintiffs attorney demands, and higher jury awards, and the continued roll back of state specific damage caps demand we take the necessary steps to ensure the integrity of our balance sheet.
The increase in the combined ratio is likewise loss driven and further exemplifies the reality of the environment for which we have so carefully prepared one of the increasing risk in which all those companies who are prepared for the worst can achieve the best. As we have said, before ProAssurance is built to withstand and indeed thrive in challenging times such as these, and as you will hear from Mike and Kevin and Dana we are taking the steps necessary to ensure our continued long term success.
With that, I'd like to ask Dana to take us into the details of the quarter. Dana?
我还要欢迎并祝贺Mike Boguski和Kevin Shook在我们的执行领导团队中担任新角色，该团队在第一季度电话会议后不久即生效。我很高兴你们每个人带来的见解和经验，并期待我们将共同完成的事情。
Thanks Ned. Consolidated net income for the quarter totaled approximately $11.5 million or $0.21 per diluted share, a decline quarter-over-quarter. This was primarily due to a decrease in equity and earnings of unconsolidated subsidiaries, a higher current accident year net loss ratio and a lower amount of favorable development relating to prior accident years. The results of our specialty P&C segment continue to reflect our cautious approach to the loss environment that Ned previously mentioned.
Non-GAAP operating income, which excludes the effect, the after-tax effect of net realized investment gains was approximately $4.1 million in the quarter or $0.08 per diluted share and consistent with the first quarter. Please refer to our news release for a reconciliation of net income to non-GAAP operating income.
Consolidated gross premiums written were relatively unchanged from the year ago quarter, excluding the effect of the loss portfolio transfer completed in the second quarter of 2018 and the effect of the regular renewal cycle of our 24-month policies. Premiums written declined in our workers' compensation insurance and segregated portfolio sale reinsurance segment, which Kevin will address later in the call. These decreases were offset by an increase in the Lloyd segment as Ned stated in his introduction, we are dedicated to maintaining the disciplined underwriting standards, necessary to write business at premium appropriate to the assumed risk. We are willing to walk away from business we deem to be underpriced.
The loss ratio and combined ratio were affected by a $10 million loss within one of the segregated portfolio sales in our SPC operation. Importantly we are not an owner or participant in this sale and ultimately this loss has no impact on our earnings.
Excluding the effects of this loss and the loss portfolio transfer, our consolidated current accident year net loss ratio increased from 80.6% to 83.5% and our expense ratio was relatively unchanged.
Net favorable reserve development was $16 million in the quarter, down $22.8 million in the prior year period, a further effect of our consideration of the current loss environment. This brings us to a consolidated combined ratio of 105.8% for the quarter, excluding the effect of the E&O policy and loss portfolio transfer, a 6.4 point increase compared to the year-ago quarter and a slight improvement compared to the first quarter.
Our consolidated net investment result for the quarter was $18.4 million, a decline of $9.4 million compared to the year ago quarter. This was primarily due to $10.5 million decline in earnings from our unconsolidated subsidiaries, driven by lower reported earnings from two of our limited partnership investments. This is somewhat offset by an increase of approximately $1.2 million in net investment income, primarily attributable to higher yield in certain asset classes within our fixed maturity and short-term investment portfolios as well as an increase in our average investment in fixed maturity securities.
We believe pricing in the healthcare professional liability market is firming. This creates growth opportunities for companies with strong balance sheets, either organically as customers seek higher quality companies for their coverage needs, or through mergers and acquisitions.
Our capital management strategy is geared towards ensuring both the strength of our balance sheet and that we are poised to take advantage of potential opportunities as they appear.
Now I'll turn the call over to Mike Boguski for his comments on the results from our Specialty Property & Casualty segment. Mike?
现在我将把这个电话转给Mike Boguski，他对我们的特殊财产和伤亡部门的结果发表了评论。 麦克风？
Thank you Dana. I'd like to start by congratulating Ned on his promotion as Chief Executive Officer. We all look forward to supporting his vision and leadership into the future. Also congratulations to Kevin Shook on his promotion to President of Eastern.
The Specialty P&C segment recorded a second quarter operating loss of $8.4 million, an improvement from the first quarter loss of $12 million. In addressing the factors that led to that result, it's important to understand the significant impact that the loss portfolio transfer booked in the second quarter of 2018 had on the quarter-over-quarter comparison.
The loss portfolio transfer accounted for $26.6 million of premium written and fully earned in the second quarter of 2018, which was also booked at a 95% loss ratio. For more meaningful comparisons my discussion of the numbers and ratios for Specialty Property & Casualty will exclude the effect of the loss portfolio transfer.
Starting with the top line trends. Gross premiums written were essentially flat quarter-over-quarter exclusive of the effect of the $5.5 million increase in 24-month policy premiums due to the timing of the renewal cycle. We were pleased and encouraged by solid premium retention across the Specialty P&C segment during the quarter, while achieving renewal rate increases of approximately 4%.
Highlighting two important portfolios of business in this segment, the physician premium retention was 88% during the quarter while achieving rate increases of 3%. Premium retention for the facilities book was 80%, reflecting continued underwriting discipline while successfully securing an average renewal rate increase of 17% on this business in the quarter.
Also we were particularly pleased with the 92% premium retention in our podiatric and chiropractic business this quarter. This underwriting discipline combined with our deep specialization, high quality risk selection and ability to obtain the right price for the exposure are the cornerstones of our strategy to achieve a long-term underwriting profit. We will also continue to focus on driving operational efficiency and improving our competitive position into the future.
New business written in the quarter was $8.1 million consistent with the second quarter of 2018. The increased accident year loss ratio trends drove the operating loss in the quarter. The calendar year loss ratio increased to 84.1% as compared to 73.4% in the second quarter of 2018. This was driven by a 3.3 percentage point increase in the accident year loss ratio and lower favorable reserve development.
We continue to take the necessary steps to maintain the strength of our balance sheet. This requires a cautious view of emerging severity trends resulting in the higher accident year loss pick and less favorable development. The expense ratio was flat quarter-over-quarter.
Finally, we were very pleased with the strong performance of our life sciences operation which has produced an attractive underwriting profit in the first half of 2019. Ken?
Thank you, Mike. Kevin will you please take us through Workers' Compensation Insurance and Segregated Portfolio Cell Reinsurance segments?
I will. Thank you, Ken. The Workers' Compensation Insurance segment produced operating income of $2.3 million for the quarter the workers' compensation insurance marketplace continues to be highly competitive as evidenced by our gross premiums written which declined 9.4% quarter-over-quarter to $64.2 million.
New business written decreased to $6.6 million from $13.4 million a year ago. This decrease is due in part to the effect of the Great Falls renewal rights transaction which added $4.3 million of traditional workers' compensation new business for the second quarter of 2018.
Premium retention decreased to 81% due in large part to our continued commitment to our underwriting. As we've discussed in the past, a strong economy results in low unemployment and more inexperienced workers entering the workforce resulting in increases in both claims frequency and severity.
That said, our careful assessment of risk resulted in a price decrease of just 4% on renewing premium in keeping with improving loss trends. Eastern is committed to its disciplined individual account underwriting and consistent application of the business model that has made us successful through changing insurance cycles and economic times. This strategy resulted in strong claim closing patterns in the quarter with 19% of 2018 and prior claims closed during the quarter and 39% closed during 2019.
As a result we recognized net favorable reserve development of $1.1 million in our Workers' Compensation Insurance segment for the quarter. The increase in the current accident year loss ratio to 68.2% primarily reflected the impact of an annual aggregate deductible that was added to our reinsurance treaty effective May 1st, 2019. The impact of renewal rate decreases on the 2019 accident year loss ratio was offset by the previously mentioned favorable claim trends during 2019.
Before I get into the results of the Segregated Portfolio Cell Reinsurance segment I want to touch base on the loss Dana mentioned earlier. One of the segregated portfolio cell programs at Eastern Re assumed an errors and omissions liability policy from a captive insurer unaffiliated with ProAssurance.
During the quarter, a claim was filed under this policy that met the lifetime maximum loss limit of $10 million. We have no participation or ownership interest in this particular cell. This loss increased net losses and loss adjustment expenses and decreased the segregated portfolio cell dividend expense correspondingly resulting in no impact to our operating results.
However, the dividend expense is not included in the calculation of the expense ratio resulting in the higher combined ratio. Excluding the impact of the E&O reserve the accident year loss ratio actually decreased by 2.3 percentage points to 63.8% and the combined ratio for the segment increased 3.4 percentage points to 82.8%. For more details please refer to our filed Form 10-Q for the second quarter which includes a comparison of reported figures adjusted for the effect of the E&O reserve.
在我进入隔离投资组合细胞再保险部门的结果之前，我想触及基于前面提到的损失Dana。 Eastern Re的一个独立投资组合单元程序承担了与ProAssurance无关的专属保险公司的错误和遗漏责任政策。
The Segregated Portfolio Cell Reinsurance segment reported operating income of $848,000 for the quarter. Gross premiums written were $16.9 million in the quarter, down 11.5% from $19.1 million in 2018, primarily attributable to decreases in retention and renewal pricing, again both resulting from our response to the intense competition in the marketplace.
Alternative market solutions are in high demand as policyholders seek ways to manage controllable expenses. We offer a unique product that allows both healthcare professional liability and workers' compensation lines in a single segregated portfolio cell, leveraging monoline expertise for both coverage types.
Retention decreased to 85% in the quarter but remained flat at 93% year-to-date. Even at 85%, the retention rate is solid in this competitive market. Following trends similar to those of our Workers' Compensation Insurance segment, pricing on Workers' Compensation business in our Segregated Portfolio Cell Reinsurance segment is down 7%, in line with loss trends within this segment of our business.
We recognized net favorable reserve development of $2.3 million in the quarter compared to $3 million in the same quarter of 2018 which primarily reflected better than expected claim trends in the 2015, 2016, and 2017 accident years. Ken?
Thanks Kevin. Ned, will you please give us an update on Lloyd's before your closing comments.
Sure Ken. As we stated for several quarters now, we view our participation in the two Lloyd's of London Syndicates in which we participate as an investment. As with any investment we consider the long-term value created by such a partnership more than the short-term fluctuations.
We believe that our original thesis of affiliating with Duncan Dale and Dale Underwriting Partners remains valid today. In the second quarter, both the net loss ratio and the underwriting expense ratio declined by 3.1 and 2.3 percentage points, respectively while net premiums written almost doubled to $18.8 million. This increase was driven by both increases in renewal pricing and exposure growth on new business.
New business growth was strong as well the renewal rate increases are particularly encouraging. The Syndicate will be putting together its proposed business plans for 2020 over the next several months and we will be in a better position to discuss the 20-year of account once that is complete. We do continue to look at ways to reduce our exposure to the syndicate. Ken?
我们相信，我们与Duncan Dale和Dale Underwriting Partners关联的原创论文今天仍然有效。在第二季度，净亏损率和承保费用率分别下降了3.1和2.3个百分点，而净保费几乎翻了一番，达到1880万美元。这一增长主要得益于续订定价的增加和新业务的风险增长。
Thank you, Ned. Any closing comments for us before we begin taking questions.
Yeah Ken. Thank you. I want to reiterate our commitment to the strength and stability of our growth at any cost and to building long-term value of the short-term results. If there is an advantage to be found in a quarter like this one, it's the evidence that these statements are more than just words, they are philosophy, one in which we believe wholeheartedly and one that will keep us pointed in the right direction, while competitors become lost.
Because of this consistent strategy across the lines of business in which we specialize, I believe we have the best book of business in the industry with the most innovative products and services. Combined with our exceptional employees across our operating subsidiaries, ProAssurance is positioned to excel during what we expect to be a tumultuous period for many of our competitors and the property casualty industry at large. Ken?
是的肯。 谢谢。 我想不惜一切代价重申我们对增长的力量和稳定性的承诺，并建立短期结果的长期价值。 如果在像这样的四分之一中找到一个优势，那就是证据表明这些陈述不仅仅是单词，它们是哲学，我们全心全意地相信，一个能使我们指向正确的方向，而 竞争对手迷失了。
Thank you, Ned. Nicole that concludes our prepared remarks. We are ready for questions.
谢谢你，奈德。 妮可总结了我们准备好的言论。 我们已准备好提问。
Thank you. We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Greg Peters of Raymond James. Please go ahead.
谢谢。 我们现在开始问答环节。 [操作员说明]我们的第一个问题来自Raymond James的Greg Peters。 请继续。
Good morning. I have a couple questions. I wanted to circle back to the Specialty Property Casualty results and specifically you talked about what you're doing from an underwriting perspective and reserving perspective about increased severity in the market but not in your own book.
I'm trying to reconcile that cautious posture with the fact that you're continuing to report favorable reserve development. To me, it seems like if you're concerned about substantial increases in severity that reserve development would also diminish substantially.
早上好。 我有几个问题。 我想回到专业财产保险结果，特别是你从承保的角度讨论了你正在做的事情，并保留了市场严重程度增加的观点，但没有在你自己的书中。
Yeah, Greg its Ned. So, if you kind of look over time you will see that the amount of favorable development has reduced over time, but we do continue to view our reserves as adequate and continue to see on a quarter-over-quarter basis that loss trends while worse than they have been are still not at the level that's embedded in our reserving for those prior accident years. So, that's why we end up continuing to have a level of favorable development.
We -- as we have talked in the past, take a pretty conservative view when we establish those reserves and a pretty pessimistic view of what loss trends will do. And loss trends while worse than they have been over the last number of years, continue to be slightly better than kind of what's embedded in that reserving analysis.
是的，格雷格是内德。 所以，如果你看一下，随着时间的推移，你会看到有利的发展量随着时间的推移而减少，但我们继续认为我们的储备充足，并继续看到季度基准上的损失趋势，而更糟糕的是 比起他们已经存在的水平还没有达到我们为之前的事故年度预留的水平。 所以，这就是我们最终继续保持良好发展水平的原因。
我们 - 正如我们过去所谈到的那样，在我们建立这些储备时采取相当保守的观点，并对损失趋势将会做什么持悲观态度。 而损失趋势虽然比过去几年更糟，但仍然比保留分析中的内容略好一些。
Can you just remind me when you started to change your posture with the severity was it six quarters ago or was it--?
当你开始改变你的姿势时，你可以提醒我，严重程度是六个季度前还是 - ？
I'll have to look back Greg, but yeah, it was probably about six or so quarters ago where we began to talk about the fact that within the marketplace we were seeing severity increases. And I do want to go back to one other comment you said where we have not really seen these changes in severity within our own book of business is in our paid losses.
We have observed increases in case reserves being established by our claims professionals across the organization and it's just still too early to tell given the tail on this business as to whether these are going to develop into paid losses or not.
So, the target accident year would probably be 2016 or 2017 that we'd want to track over the next several quarters to see how that ultimate pattern develops to get a sense of where your business is going to be going. Is that a fair assessment?
I think that is. It takes 24 or more months before we begin to have any kind of paid data really emerging out of those accident years and better claims data. So, I think that's a good assumption Greg.
我想是的。 我们需要24个月或更长时间才能开始在这些事故年代和更好的索赔数据中出现任何类型的付费数据。 所以，我认为这是一个很好的假设Greg。
Okay, thanks. I guess on the Lloyd's business and I know you're -- it's just an investment for you, but it seems like a lot of the rate movement in that market has been around property exposures. And I'm just curious, if you have a sense of for the 2019 year potential more exposure to hurricane catastrophe type volatility for the Lloyd's business than in previous years, because that's where the most of the action has been or maybe I have a different -- maybe I have a wrong perspective?
好的谢谢。 我想劳埃德的业务，我知道你 - 这只是对你的一项投资，但似乎该市场的很多利率变动都是围绕房地产风险敞口进行的。 而且我只是好奇，如果你对2019年潜在的Lloyd业务飓风灾难类型波动的感觉比往年更多，因为这是大多数行动已经或者我可能有不同的地方 - 也许我的观点不对？
I think for the overall market Greg, you're right. The largest most significant rate increases within the Lloyd's marketplace have been in the property lines, especially those property lines that are loss affected and the same would hold true for us. For our book of business, I would say that on a net basis, when you factor in the reinsurance that is bought by the Syndicate that our exposure has not grown dramatically from prior periods. We do still remain exposed to that catastrophe exposure.
As we talked a couple of quarters ago, we have looked at ways to lessen the exposure on the 2019 year of account and to be honest we have just not found terms that we found acceptable to us, the economics were just not I guess what I would call fair enough in the scenarios that we looked at. And so we continue to be a full participant in the 2019 year of account. And as I mentioned in our prepared remarks are looking at the 2020 year of account now.
我认为对于Greg的整体市场，你是对的。 劳埃德市场内最大幅度的涨幅最大的是房地产线，特别是那些受损失影响的房产线，同样适用于我们。 对于我们的商业书籍，我会说在净额的基础上，当你考虑到辛迪加购买的再保险时，我们的风险敞口并未从之前的时期大幅增长。 我们仍然面临这种灾难风险。
正如我们几个季度前谈过的那样，我们已经研究了如何减少2019年账户的风险，说实话，我们还没有找到我们认为可以接受的条款，经济学不是我猜我的意思 在我们看到的情景中，我会称之为公平。 因此，我们将继续成为2019年帐户的完全参与者。 正如我在准备好的评论中提到的那样，现在正在考虑2020年的账户。
Got it. Well congratulations on your first conference call everyone without stand you read your prepared script as well as you've ever done before so…
Our next question comes from Christopher Campbell of KBW. Please go ahead.
我们的下一个问题来自KBW的Christopher Campbell。 请继续。
Yes, good morning. First question is on the specialty P&C segment, physicians' rates were a little bit slower sequentially about 100 bps anything happening there that's kind of reducing the rate momentum you're seeing in Medmarc?
Yeah, Chris, it's Mike. One thing to keep in mind on the physicians' rate, it's included our podiatric business as well. So the physician rates were actually a little bit over roughly in the 4% range and there was a slight decrease on the podiatric business of about 1.4% I believe in the quarter, which brought it down to 3%. But what we've seen kind of quarter -- consistently throughout towards the end of 2018 and 2019 is consistent kind of three to five point rate increases on that book.
是的，克里斯，这是迈克。 关于医生的费率要记住一件事，它也包括我们的足病业务。 因此，医生的费率实际上略高于4％的范围，并且我认为本季度的实践业务略有下降约1.4％，这使其降至3％。 但是我们所看到的那种季度 - 始终贯穿2018年和2019年底，这本书的价格一直是三到五个点。
And now if at all let me give you some quarter-over-quarter comparisons just based on states that have heavier renewals in a given quarter, as Mike mentioned the podiatric business having a heavy second quarter renewal impact. So it's more timing. I think than trends indicating.
现在，如果根本就让我根据某一季度更新续订的州进行一些季度比较，那么就像迈克提到的那样，第二季度续约影响很大。 所以这是更多的时机。 我认为比趋势表明。
Okay, great. And then I guess just overall, where do you think the market needs to get to in terms of rates to get to rate adequacy or is that kind of still too early to call with uncertainty that you're seeing on the loss cost side?
Yeah, Chris, I think it probably is a little early to call. I think everybody is now more awake to what we've been talking about for six or so quarters. We have begun to see more of that kind of more disciplined underwriting and drive toward price in the marketplace. The large verdicts continue, the headline makers continue, it certainly has not abated, the reinsurers will feel the most pain on those large verdict. But that will have a trickle down effect onto the market, but I think because a lot of this is really just in the encouraged stage and not the paid stage, it's going to be a little bit longer before we know kind of where the kind of the tipping point is on pricing. That's always a challenge and that's why we have cycles in the industry, because we consistently overshoot and undershoot given the fact that we're looking backwards at losses to try and price today.
是的，克里斯，我认为这可能还有点早。 我想现在每个人现在都对我们六个左右的季度所讨论的内容更加清醒。 我们已经开始看到更多那种更有纪律的承保，并推动市场价格。 大的判决继续，标题制造商继续，它肯定没有减少，再保险公司将感受到那些大的判决最痛苦。 但是这会对市场造成一种涓滴效应，但我认为因为其中很多只是处于鼓励阶段，而不是付费阶段，所以在我们知道某种类型的情况之前，它会更长一些。 引爆点是定价。 这一直是一个挑战，这就是为什么我们在行业中有周期，因为我们一直在超调和下冲，因为我们正在考虑今天试图降价的损失。
This is Mike. I think I'd just add on that that we've seen a general message out there of competitors looking to achieve rate on the renewal books for both their facilities business and their physician books it varies by region and state, but a year ago we weren't seeing that. So I think that's just kind of an encouraging trend for us.
这是迈克。 我想我只是补充一点，我们已经看到一些普遍的消息，竞争对手希望在他们的设施业务和他们的医生书籍的更新书上获得率，因地区和州而异，但一年前我们 没有看到。 所以我认为这对我们来说只是一种令人鼓舞的趋势。
And then why is healthcare so much worse in the physicians book? Why does that need so much more rate?
I think there are two reasons that I would point to, one you've got more commercial capital that typically plays in that space. And it can be more rate focused, rate driven because that's what they have to compete on. They don't necessarily bring a particular expertise to the marketplace and so big premium dollars on individual accounts that attracts commercial capital. They can under price the business. I think the other thing that's going on is and this is not exclusive to the facilities space, but from a social perspective, it's a lot easier to come up with a big jury award against an impersonal brick building commercial enterprise than it is defined against the physician. We certainly see cases where juries are awarding big verdicts against physicians as well, but it's a lot easier I think for a jury to find against bricks-and-mortar.
我认为有两个原因可以指出，一个是你有更多商业资本通常在这个领域发挥作用。 它可以更加注重利率，因为这是他们必须参与竞争的因素。 它们并不一定会为市场带来特定的专业知识，而且个人账户上的巨额溢价会吸引商业资本。 他们可以为企业定价。 我认为正在发生的另一件事是这并不是设施领域所独有的，但从社会角度来看，对于一个非个人化的砖砌建筑商业企业，提出一个大陪审团裁决要比对它的定义要容易得多。医师。 我们当然会看到陪审团对医生提出大判决的案例，但我认为让陪审团找到反对实体的情况要容易得多。
Great. And then just switching to workers' comp, why were the workers' comp rates down more in the SPC segment than the Workers' Comp segment. I guess what are you seeing in terms of frequency and severity in both of those segments?
非常好。 然后换成工人补偿，为什么SPC部门的工人补偿率比工人补偿部分要低。 我想你在这两个细分市场的频率和严重程度方面看到了什么？
Yeah. This is Kevin. The frequency and severity has been very consistent with the overall book of business. The segregated portfolio cell business is a little more economically sensitive. There has been more growth in it. So more inexperienced workers and I think that's probably driven up the severity a little bit there. The frequency has been kind of flat in that book of business.
I wouldn't focus so much on the second quarter rate decline of 7%, but really look at the year-to-date. It's a very profitable book of business. We individually account underwrite every single policy and the rate is indicative of our desire to keep the good accounts. But I would certainly look more at our six-month results than I would focus in on the second quarter result itself.
是啊。 这是凯文。 频率和严重程度与整本业务书非常一致。 隔离的投资组合单元业务在经济上更敏感。 它有更多的增长。 因此，更多没有经验的工人，我认为这可能会在一定程度上推高其严重程度。 在那本商业书中，频率有点平淡。
我不会那么关注第二季度7％的利率下降，但真的要看年初至今。 这是一本非常有利可图的商业书籍。 我们个人账户承保每一项政策，而且利率表明我们希望保留好账户。 但我肯定会更多关注我们的六个月结果，而不是我将关注第二季度的结果。
Okay, got it. And is the workers' comp are you -- what are you seeing in your core workers' comp book. Is frequency flat in that or is it still down? What's happening there?
好，知道了。 你的工作人员是你 - 你在核心工作者的补偿书中看到了什么？ 频率是平稳的还是仍然下降？ 那里发生了什么？
Yeah. So in 2016 and 2017, it was kind of flat to up maybe a point. This year we're actually seeing it flat to down a little bit, and severity trends fairly consistent with what I just said about the Segregated Portfolio Cell Reinsurance segment.
是啊。 因此，在2016年和2017年，它可能是一个平局，也许是一点。 今年我们实际上看到它平缓了一点，严重程度趋势与我刚才所说的隔离投资组合细胞再保险部分相当一致。
Okay, got it. And then what rate increases are you guys getting in the Lloyd's book?
Hey, Chris, it's Ned. I don't have the specifics. In the property exposure, it's certainly in the teens and greater. The casualty book, it's in the probably low to mid single-digits.
嘿，克里斯，这是内德。 我没有具体细节。 在房产曝光中，它肯定在十几岁甚至更大。 伤亡书，它可能是低至中等单位数。
Okay, great. Well, thanks for all the answers, best of luck for the third quarter.
Thanks a lot.
[Operator Instructions] Our next question comes from Mark Hughes of SunTrust. Please go ahead.
[操作员说明]我们的下一个问题来自SunTrust的Mark Hughes。 请继续。
Hey. Good morning, guys. This is Michael Ramirez in for Mark. Thanks for taking our questions this morning. I guess first, how much higher does physician pricing need to go before you consider equity? So for example, like, you can drop your accident year loss ratio down to be more in line with our long-term average?
嘿。 早上好家伙。 这是迈克尔拉米雷斯为马克。 感谢您今天早上提出问题。 我想首先，在考虑公平之前，医生定价需要多高？ 例如，您可以将您的事故年损失率降低到更符合我们的长期平均水平吗？
Yeah. Michael, I think it's too early to call that. We have not seen the severity trends really manifest in paid losses, and until we get a sense of where paid losses are actually heading, it's hard to know. We believe we are getting the rate that we need. But it's early days yet to tell.
是啊。 迈克尔，我认为现在说这个还为时过早。 我们还没有看到严重趋势在付费损失中真正体现出来，直到我们了解到付费损失实际上在哪里，我们很难知道。 我们相信我们正在获得所需的费率。 但现在还没有说明。
Yeah. I think one other point -- it's Mike. If you keep in mind there is -- as the renewal rates just started to come through in 2018 and 2019 increases, and that takes time to earn out over an in-force book. So, that will be helpful into the future. But -- and then, we've got – obviously, correlate that to where the loss trends are going.
是啊。 我想另一点 - 这是迈克。 如果你记住这一点 - 因为2018年和2019年的续约率刚刚开始增加，并且需要时间来赚取有效书。 所以，这将有助于未来。 但是 - 然后，我们已经 - 显然，将这与损失趋势发生的地方联系起来。
Okay. Thanks for that. Second, what is your perception of your competitors' view on loss trends in the medical professional liability segment? So are they acting like there's meaningful inflation in the system? Or is it just pretty much business as usual?
好的。 感谢那。 其次，您对竞争对手对医疗专业责任部门损失趋势的看法有何看法？ 那么他们是否表现得像系统中有意义的通货膨胀？ 或者它只是照常营业？
We said a few minutes ago, we are beginning to see competitors react to the severity trends in the marketplace and I think we were probably calling that pretty early and we're alone six quarters ago, when we were and I would say that the industry has really caught up to us at this point.
Okay. Yes. I apologize if we missed that from earlier.
好的。 是。 如果我们错过了之前的话，我道歉。
Maybe one on workers' comp here. So are there any one or two sort of competitors that are being particularly aggressive in this space, which led to kind of like a slowdown in written premiums? Or is it just basically a broader market shift?
也许有人在这里工作。 那么在这个领域是否有任何一两种竞争对手特别具有攻击性，这有点像书面保费的放缓？ 或者它基本上是一个更广泛的市场转变？
It's a broader market shift. I mean, we're seeing competition from the package players that are leveraging comp to offset losses in commercial auto and umbrella and general liability. We're seeing competition from monoline workers' comp players.
And just, in speaking about the decrease in direct written premium, I mean, again, it's a result of our focus on underwriting profit and individually account underwriting every one of our policies to make sure that we've got the adequate rate for exposure. But competition remains heavy. It's coming from kind of all sides and all regions and we've built Eastern for sustainable results through changing insurance cycles and economic times. So --
这是一个更广泛的市场转变。 我的意思是，我们看到来自包装运营商的竞争正在利用补偿来抵消商业汽车和伞形和一般责任的损失。 我们看到来自monoline工人的竞争对手的竞争。
而且，在谈到直接书面保费减少时，我的意思是，这是因为我们专注于承保利润和个人账户承保我们的每一项政策，以确保我们有足够的风险承担率。 但竞争仍然很激烈。 它来自各方和所有地区，我们通过改变保险周期和经济时期建立了东方可持续的结果。 所以 -
That’s helpful. And then, maybe one housekeeping, I apologize once again if this has already been discussed or asked. But what is your reasonable outlook for equity and earnings of unconsolidated subsidiaries?
这很有帮助。 然后，也许一个家务，我再次道歉，如果已经讨论或要求。 但是，您对未合并子公司的股权和收益的合理前景是什么？
It's a good question. It's kind of a volatile part of our investment portfolio. So it's hard to predict kind of quarter-over-quarter. On a number of those investments, there is a reporting lag, a timing lag and so you can kind of look back at the economic performance over the prior quarter and sometimes get an indication of where we think things might be headed.
But as, I think, we've said since we began investing in some of these investments, it is volatile over the long term and our focus, as always, is over the long term. We are getting and have been getting superior returns because of these investments. It is going to add volatility and then personally, right now, where our operating earnings are being stressed, that volatility manifests itself a little more than it would have in the past, but I really am sorry, but I can't give you any good guidance on that.
这是一个很好的问题。 这是我们投资组合中不稳定的一部分。 因此，很难预测季度环比。 在一些投资中，存在报告滞后，时间滞后，因此您可以回顾上一季度的经济表现，有时可以看出我们认为可能出现的情况。
但是，我认为，自从我们开始投资其中一些投资以来，我们已经说过，从长远来看，它是不稳定的，而且我们一如既往地关注长期。 由于这些投资，我们正在获得并获得高额回报。 它会增加波动性，然后就个人而言，现在我们的营业收入受到压力，波动性表现得比过去多一点，但我真的很抱歉，但我不能给你任何 对此的良好指导。
Understood. Okay. Great, guys. Thanks for all the questions.
了解。 好的。 好的，伙计们。 感谢所有问题。
This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Ken McEwen for any closing remarks.
这就是我们的问答环节。 我想将会议转回Ken McEwen先生的任何结束语。
That's all we have. Thank you for joining us and we'll talk to you again in November.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
会议现已结束。 感谢您参加今天的演讲。 您现在可以断开连接。
- ProAssurance Corp 电话会议
- ProAssurance Corp 财务报告
- 老虎证券开户教程 美股8折佣金， 11股小米股票（价值385港币）, 还会邀请你进付费交流群
- 雪盈证券开户教程 开户后 最高可领取1066港币。美股佣金最低0.002美元/股，港股小额免佣，打新手续费全免
- 富途牛牛证券开户教程 开户即可领取1股汇丰，入金达到2万港币即可领取1股腾讯；新股一键认购，最高支持10倍杠杆融资，免新股认购手续费，暗盘交易免佣；
- 华盛通开证券户教程 开通美股或者港股， 享受现金200元,美股8折奖励。
- 微牛证券开户教程 首次入金到账2000美金以上，可以免费抽取5只股票，每只价值9-1400美金。转仓可以报销，上限100美金。
- 必贝证券开户教程 开通后 享有280元现金奖励
- 玖富证券开户教程 开通后 最低入金1W港币可以领218元红包
- 长桥证券开户教程 开通后 可获得15美金~25美金奖励
- 盈立证券开户教程 注册随机领3股，注册后可随机抽取苹果、腾讯、阿里、京东等热门股票
- 如何办理新加坡卡, 在线办理, 没有资金门槛
- 美股开户教程, 请查看
- 港股开户教程, 请查看
- 美股、港股入金教程, 请查看
- 美股、港股投资交流群, 请查看
- 美股、港股开户优惠汇总, 请查看
- 如何购买ProAssurance Corp股票
- 美股、港股付费交流群, 请查看