ProAssurance Corp.'s profit slipped 1 percent in the first quarter, as the medical malpractice insurer booked losses on its investment portfolio, and continued to suffer from a squeeze in premium rates across the industry, the company said Wednesday.
ProAssurance earned $35.9 million, or $1.04 per share, in the quarter ended March 31. In the first quarter last year, the insurer earned $36.1 million, or $1.02 per share.
The per-share results reflect a 3 percent decline in the number of outstanding shares versus the prior-year quarter.
Analysts polled by Thomson Financial, on average, forecast profit of $1.16 per share.
The company collected $160.3 million in premiums, a 14 percent decline from the first quarter of 2007. ProAssurance said a lot of insurers, competing for new clients, have been slashing their rates.
Of each premium dollar collected, ProAssurance spent 89.5 cents administering claims, 2.3 cents on the dollar less than the first quarter of 2007.
While moderate claims mean the company is not losing much on its policies, they also mean insurers are willing to charge lower premiums, the company said.
"Like virtually every company in our segment of the insurance industry, we continue to experience a decline in premiums," said Chief Executive W. Stancil Starnes.
Starnes said the company has cut prices a little, but refuses to "chase growth" by pricing policies too cheaply or shouldering unwise risks.
ProAssurance also booked a $1.4 million investment loss on two portfolios, one of stocks and one of distressed debt. A 10 percent decline in the stock market and the turmoil in credit markets pinched the values in these portfolios, the insurer said.
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