Mark Hughes's questions to ProAssurance Corp (PRA) leadership • Q1 2024
Question
Mark Hughes from Truist Securities asked if mutual competitors are engaging in cash flow underwriting due to high interest rates, requested a breakdown of the drivers for the improved current accident year loss ratio, and inquired about the trajectory of NCCI loss costs.
Answer
President and CEO Edward Rand confirmed that mutuals' underwriting is investment income-driven, allowing them to accept higher combined ratios, but warned this creates a compounding pricing gap. He attributed the loss ratio improvement to prior pricing gains outpacing severity trends, Q1 claims experience, and a better mix of business. Regarding NCCI, both Rand and executive Kevin Shook stated their focus is on their own data, viewing NCCI's as backward-looking, though Shook noted NCCI is acknowledging industry concerns about medical inflation.