Note: EPS may not be comparable

ProAssurance (NYSE: PRA) reported Q4 EPS of $0.55, $0.07 worse than the analyst estimate of $0.62. Revenue for the quarter came in at $191.74 million versus the consensus estimate of $186.95 million.

Fourth Quarter 2017 Highlights

• Consolidated gross premiums written were $4.3 million higher than the year-ago quarter, primarily due to higher premiums in our Workers\' Compensation segment. Gross premiums written in our Specialty P&C segment were $4.2 million lower than in the fourth quarter of 2016, primarily due to an $11.8 million single premium policy written in the comparative quarter last year. Premiums written in our Lloyd\'s segment declined $1.1 million compared to the same period last year, primarily due to a revision to estimated reinstatement premiums following storm-related losses in the third quarter of 2017.
• Net premiums earned decreased 5.5% quarter-over-quarter. Within Specialty P&C, net premiums earned decreased 7.5% due to the effect of the $11.8 million policy, which was written and 100% earned in the fourth quarter of 2016. In our Lloyd\'s segment, net premiums earned decreased due to the effect of a revision to our estimate of reinstatement premiums we expect to receive from insureds as well as pay to our reinsurers associated with the storm-related losses. Net premiums earned in our Workers' Compensation segment were 1.4% higher in the quarter than in 2016.
• We continue to have success in our coordinated sales & marketing programs, which generated $4.3 million in new business in the fourth quarter of 2017.
• Net favorable development was $44.3 million in the quarter, as compared to $49.3 million in the year-ago period. There was net favorable development in all operating segments, $37.4 million in Specialty P&C, $6.7 million in Workers\' Compensation and approximately $235,000 in our Lloyd\'s segment.
• The consolidated underwriting expense ratio increased 3.4 points over the fourth quarter of 2016 due to lower net premiums earned in our Specialty P&C segment, due to the single premium policy written and earned in the fourth quarter of 2016.
• Net realized investment losses were $2.4 million in the fourth quarter of 2017, compared to net realized investment gains of $16.6 million in 2016. The difference is the result of $12.8 million of impairments recognized in 2017, which had no counterpart in 2016, as well as a quarter-over-quarter decline in realized gains and unrealized holding gains in our portfolio. Our net investment result for the quarter was essentially flat at $25.6 million, as higher reported earnings from an energy-focused LP and our trading portfolio offset lower earnings from our fixed maturity investments.
• The enactment of the Tax Cuts and Jobs Act (TCJA) had a significant impact on our fourth quarter 2017 taxes, which were $16.9 million, compared to $8.7 million in fourth quarter 2016. The passage of the new tax law resulted in a $10.0 million charge to tax expense in the quarter, principally from the revaluing of deferred tax items. For purposes of our analysis we consider this tax impact to be a one-time item and we have eliminated it in our calculation of Non-GAAP operating income that follows. The impact of the TCJA is discussed in depth in under the "Corporate Segment" heading below.

For earnings history and earnings-related data on ProAssurance (PRA) click here.