Executive Summary

Q3 2025 was mixed: Non-GAAP operating EPS was $0.15, down sharply q/q from $0.52 and y/y from $0.32, as underwriting results weakened; GAAP EPS was $0.03. Total revenues were $279.6M, up sequentially and modestly below y/y; investment income rose 8.5% y/y to $40.4M .
Versus S&P Global consensus, PRA missed on EPS ($0.15 actual vs $0.265 estimate)* and beat on revenue ($279.6M actual vs $268.7M estimate)*, with non-operating items of $6.5M weighing on GAAP results (foreign exchange and transaction costs) . Values retrieved from S&P Global.
Specialty P&C Non-GAAP combined ratio deteriorated to 109.1% (from 95.2% in Q2), reflecting higher current accident-year loss ratio and much less favorable prior-year reserve development; Workers’ Comp combined ratio was 113.5% (vs 115.4% in Q2) .
Management highlighted continued rate adequacy actions (8% renewal increases; >80% cumulative since 2018) and stable retention at 84%. Net premiums written were $261.3M; book value per share rose to $25.37; adjusted book value per share to $27.14 .
M&A update: Regulatory approvals received in AL, DC, IL, MO, VT; pending in CA, PA, TX. Anticipated closing “by June 30, 2026” (prev. “1H 2026” in Q2) .

What Went Well and What Went Wrong

What Went Well

Investment income tailwind: Net investment income increased 8.5% y/y to $40.4M, reflecting higher average book yields .
Pricing discipline and retention: 8% renewal premium increases in Specialty P&C; cumulative change >80% since 2018; retention at 84% for the segment and standard physicians book (management continues to forgo inadequately priced business) .
Capital/Book value: Book value per share increased to $25.37 (from $23.49 YE24); non-GAAP adjusted book value per share to $27.14 (from $26.86) . CEO: “Our focused efforts will be successful over the long-term in this cyclical market… we are pleased with the progress we continue to see.” — Ned Rand, President & CEO .

What Went Wrong

Underwriting deterioration: Consolidated combined ratio rose to 114.7% (vs 105.6% y/y; 103.6% q/q). Non-GAAP combined ratio rose to 112.2% (vs 106.4% y/y; 101.8% q/q) .
Specialty P&C swing: Segment result fell to a loss of $(18.5)M; Non-GAAP combined ratio 109.1% (vs 100.0% y/y; 95.2% q/q), driven by a higher current-year loss ratio and far less favorable prior-year development .
Non-operating drag: Net results were impacted by $6.5M of non-operating items (transaction costs tied to the TDC merger, FX losses, non-core run-off), depressing GAAP EPS to $0.03 .

Financial Results

Consolidated P&L, EPS, and Ratios

Metric	Q3 2024	Q2 2025	Q3 2025
Total Revenues ($M)	$285.3	$276.8	$279.6
Net Premiums Earned ($M)	$243.2	$232.4	$233.4
Net Investment Income ($M)	$37.3	$38.9	$40.4
GAAP EPS ($)	$0.32	$0.42	$0.03
Non-GAAP Operating EPS ($)	$0.32	$0.52	$0.15
Combined Ratio (%)	105.6%	103.6%	114.7%
Non-GAAP Combined Ratio (%)	106.4%	101.8%	112.2%

Versus S&P Global Consensus

Metric	Q1 2025	Q2 2025	Q3 2025
EPS (Primary/Normalized) – Estimate ($)	0.196*	0.210*	0.265*
EPS (Non-GAAP Operating) – Actual ($)	0.13	0.52	0.15
Revenue – Estimate ($M)	272.8*	265.8*	268.7*
Revenue – Actual ($M)	272.1	276.8	279.6
Values retrieved from S&P Global.

Q3 2025: EPS missed; revenue beat (see table above) . Values retrieved from S&P Global.

Segment Breakdown

Segment	Metric	Q3 2024	Q2 2025	Q3 2025
Specialty P&C	Net Premiums Earned ($M)	$188.7	$179.3	$180.8
	Segment Result ($M)	$1.9	$10.7	$(18.5)
	Non-GAAP Combined Ratio (%)	100.0%	95.2%	109.1%
Workers’ Compensation	Net Premiums Earned ($M)	$41.8	$41.5	$41.0
	Segment Result ($M)	$(4.2)	$(6.0)	$(5.1)
	Combined Ratio (%)	111.4%	115.4%	113.5%
Segregated Portfolio Cells	Net Premiums Earned ($M)	$12.6	$11.6	$11.6
	Segment Result ($M)	$0.6	$1.6	$0.9
	Combined Ratio (%)	94.6%	77.8%	88.3%

KPIs

KPI	Q3 2024	Q2 2025	Q3 2025
Specialty P&C Renewal Rate Change (%)	—	10%	8%
Retention (%) – Specialty P&C	—	81%	84%
Book Value per Share ($)	$23.49 YE24 baseline	$24.80	$25.37
Adjusted BVPS (Non-GAAP) ($)	$26.86 YE24 baseline	$27.07	$27.14
Non-GAAP Operating ROE (%)	5.6%	8.5%	2.4%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Acquisition Closing Timeline (The Doctors Company)	Closing window	“Expected to close in the first half of 2026” (Q2 PR, Aug 5)	“Currently anticipate closing by June 30, 2026” (Q3 PR, Nov 4)	Maintained timing window; refined to specific date
Quantitative Financial Guidance (revenue, margin, OpEx, tax)	FY25/FY26	None provided	None provided	No change

Note: PRA did not issue quantitative financial guidance; management commentary focused on rate adequacy, underwriting discipline, and the merger timeline .

Earnings Call Themes & Trends

No Q3 2025 earnings call transcript was available in our document set; themes below reflect press releases (Q1–Q3) and 8‑K disclosures.

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q3 2025)	Trend
Pricing/Rate Adequacy	Q2: +10% Specialty P&C renewal increase; disciplined underwriting . Q1: +8% renewals; forgoing inadequate risks .	+8% Specialty P&C renewal increase; >80% cumulative since 2018; retention 84%; continued discipline .	Stable positive pricing; slightly lower than Q2
Prior-Year Reserve Development	Q2: Significant favorable development benefited Specialty P&C (lower combined ratio) .	Much less favorable reserve development; higher current-year loss ratio; Specialty P&C Non-GAAP CR at 109.1% .	Deteriorated q/q
Investment Income	Q2: +6.5% y/y; higher book yields .	+8.5% y/y; higher yields continue .	Improving
Non-operating Items	Q2: $4.8M impact (transaction costs, FX, non-core) .	$6.5M impact; transaction-related costs and FX losses cited .	Greater drag
M&A with The Doctors Company	Q2: Shareholder approval and HSR early termination; expected close 1H’26 .	Multiple regulator approvals obtained; anticipate closing by June 30, 2026; others pending .	Progressing

Management Commentary

“Our history in medical professional liability has taught us that our focused efforts will be successful over the long-term in this cyclical market and we are pleased with the progress we continue to see.” — Ned Rand, President & CEO .
“Joining forces with The Doctors Company… will allow our organizations to continue to serve today’s healthcare providers with the necessary scale and breadth of capabilities.” — Ned Rand .
On merger timing: “We currently anticipate closing the transaction by June 30, 2026,” with approvals received in AL, DC, IL, MO, VT; pending in CA, PA, TX .

Q&A Highlights

Not available: We did not find a Q3 2025 earnings call transcript in our document set; Q&A themes could not be reviewed.

Estimates Context

S&P Global consensus for Q3 2025 EPS $0.265 vs actual non-GAAP operating EPS $0.15 → miss*. Revenue consensus $268.7M vs actual $279.6M → beat*. Values retrieved from S&P Global.
Q1–Q3 context: EPS beat in Q2 (estimate $0.21 vs actual $0.52); misses in Q1 ($0.196 vs $0.13) and Q3 ($0.265 vs $0.15)*, suggesting EPS sensitivity to reserve development and non-operating items across periods. Values retrieved from S&P Global.

Key Takeaways for Investors

Underwriting volatility re-emerged: Specialty P&C swung to a $(18.5)M loss with a 109.1% Non-GAAP CR as favorable reserve development faded; underwriting remains the key driver of quarterly EPS variability .
Core pricing progress intact: +8% renewal increases and 84% retention support the medium-term margin recovery thesis, though near-term loss ratio volatility (and mix) can overwhelm pricing gains quarter-to-quarter .
Earnings mix skewed to yield: Higher investment income (+8.5% y/y) is a durable tailwind while underwriting normalizes; this helped deliver a revenue beat despite EPS miss . Values retrieved from S&P Global.
Non-operating items matter: FX and transaction expenses ($6.5M impact) obscured core performance and will likely persist until merger close; investors should emphasize operating metrics and Non-GAAP combined ratios when assessing trajectory .
M&A progressing: Additional state approvals secured; timeline refined to “by June 30, 2026,” reducing deal uncertainty incrementally; integration and capital deployment under TDC could be longer-term catalysts .
Watch reserve signals: Q2 strength was largely reserve-driven; Q3 saw less favorable development. Monitor current accident year loss ratio and any commentary on severity trends in MPL and Workers’ Comp .
Tactical view: Near-term stock drivers likely hinge on underwriting signals (reserve development, accident-year loss ratio) and updates on regulatory approvals; medium-term thesis depends on sustained rate adequacy and merger execution .

Notes on sources:

Q3 2025 8‑K/Ex. 99.1 and press release provided the quantitative results, segment detail, ratios, and management commentary -.
Q2 2025 and Q1 2025 press releases were used for trend analysis - -.
S&P Global consensus/actuals for EPS and revenue marked with an asterisk (*) and disclosed as S&P Global values. Values retrieved from S&P Global.

PROASSURANCE CORP (PRA)·Q3 2025 Earnings Summary