ProSight Global Inc. (PROS) Tops Q2 EPS by 22c

ProSight Global Inc. (NYSE: PROS) reported Q2 EPS of $0.39, $0.22 better than the analyst estimate of $0.17. Revenue for the quarter came in at $207.41 million versus the consensus estimate of $195.69 million.

• Record net income from continuing operations of $17.3 million and adjusted operating income(1) of $16.9 million with annualized return on equity (\"ROE\") of 12.9% and adjusted operating ROE (2) of 12.6%.
• Record diluted book value per share (\"BVPS\") of $12.84 compared to $10.73 as of March 31, 2020. Book value per share was $12.01 as of December 31, 2019.
• Rate execution of 10.5% excluding workers comp and 8.8% including workers comp with acceleration throughout the quarter.
• Combined ratio of 99.6% compared to 98.1% for the second quarter of 2019, representing the tenth consecutive quarter of underwriting profit at ProSight.
• Loss ratio of 61.9% compared to 62.8% (61.7% adjusted for the effect of WAQS (3)) for the second quarter of 2019. The current quarter includes 2.0 points of catastrophe losses from civil unrest vs 1.5 points in the second quarter of 2019.
• Expense ratio of 37.7% compared to 35.3% (36.4% adjusted for the effect of WAQS (3)) for the second quarter of 2019. The current quarter includes $1.5 million, or 83 basis points, of COVID-19-related allowance for bad debt and reflects reduced earned premium associated with the impact of COVID-19. Excluding the $1.5 million allowance for bad debt, total general and administrative expenses were down 4.2% compared to the second quarter of 2019.
• Gross written premiums (\"GWP\") for our customer segments (4) decreased in line with our expectations by 19.9% to $184.2 million compared to the second quarter of 2019, due to the impact of COVID-19 on several of our niches.
• Closed on new credit facility that will refinance our existing debt on favorable terms upon maturity in November 2020.

From CEO & President Larry Hannon:

"Our thoughts are with all of those struggling from the ongoing impact of COVID-19 and we continue to stand with our Black friends, colleagues, and members of our community that are fighting for justice and equality. At ProSight, we are thankful for the outstanding effort of our employees, and the support of our customers and distribution partners during these difficult times.

"This was a strong quarter. We produced an underwriting profit, generated a double-digit ROE, achieved a new milestone in book value per share, closed on a new credit facility which will refinance our debt on attractive terms, and made progress on several initiatives that we expect will accelerate our growth and profitability in 2021. Our rate execution was excellent in the quarter and the trend has continued into the third quarter.

"Our underwriting, risk selection and expense management allowed us to remain solidly profitable and grow our book value per share. We are executing well and expect to have a solid second half of the year with an improvement in our gross written premium versus the second quarter."

For earnings history and earnings-related data on ProSight Global Inc. (PROS) click here.

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