BOCA RATON, Fla., June 17, 2020 (GLOBE NEWSWIRE) -- Saxena White P.A. has filed a securities fraud class action lawsuit in the United States District Court for the Northern District of Alabama against ProAssurance Corporation (“ProAssurance” or the “Company”) (NYSE: PRA), and certain of its executive officers, (collectively, “Defendants”) on behalf of all persons or entities who purchased or otherwise acquired ProAssurance common stock between April 26, 2019 and May 7, 2020, inclusive (the “Class Period”).
If you purchased ProAssurance common stock during the Class Period and wish to apply to be lead plaintiff, a motion on your behalf must be filed with the Court by no later than August 17, 2020. You may contact Lester Hooker (lhooker@saxenawhite.com), a Director of Saxena White P.A., to discuss your rights regarding the appointment of lead plaintiff or your interest in the class action. You may also retain counsel of your choice and need not take any action at this time to be a class member.
ProAssurance is one of the largest medical liability insurance providers in the United States. ProAssurance’s most important division is its Specialty Property and Casualty segment (“Specialty P&C”), which has consistently accounted for at least 60% of the Company’s gross premiums written since 2015. This segment includes a healthcare professional liability line of business, primarily offered to healthcare providers. While the Company provides traditional liability insurance products, ProAssurance also provides “innovative and customized products to meet the risk management needs of larger healthcare organizations or groups.”
The Complaint asserts claims for violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 against ProAssurance and certain of its executive officers. The action alleges that during the Class Period, Defendants misrepresented the Company’s underwriting and reserve standards, and failed to adequately reserve for losses. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) ProAssurance lacked adequate underwriting process and risk management controls necessary to set appropriate loss reserves in its Specialty P&C segment; (ii) ProAssurance failed to properly assess a large national healthcare account that experienced losses far exceeding the assumptions made when the account was underwritten; and (iii) as a result, ProAssurance was subject to a materially heightened risk of financial loss and reserve charges.
On January 22, 2020, ProAssurance announced that because of a deteriorating loss experience related primarily to one large healthcare account underwritten in 2016, the Company was estimating a $37 million adverse development in its Specialty P&C loss reserves for the fourth quarter of 2019. Additionally, the Company stated that since mid-2019 it had been executing a “comprehensive underwriting strategy in response to emerging trends and changing conditions in healthcare professional liability.” In response to these disclosures, ProAssurance’s stock price fell $4.18 per share, or 11%, to close at $33.40 per share on January 23, 2020.
On February 20, 2020, ProAssurance announced its 2019 fourth quarter and full year results. The Company revealed that the adverse development from this one large national healthcare account was actually $51.5 million, much larger than the initial estimate of $37 million only a month prior.
Then, on May 8, 2020, ProAssurance announced that the large healthcare client would likely not renew its policy and instead would likely exercise an option for tail coverage that would result in an additional $50 million in losses in the second quarter of 2020. This loss, when combined with the $51.5 adverse development, meant that the Company would suffer over $100 million in losses from a single account.
In response to these disclosures, ProAssurance’s stock price fell $4.38 per share, or 22%, to close at $15.95 per share on May 8, 2020.
You may obtain a copy of the Complaint and inquire about actively joining the class action at www.saxenawhite.com.
Saxena White P.A., with offices in Florida, New York, and California, concentrates its practice on prosecuting securities fraud and complex class actions on behalf of institutions and individuals. Currently serving as lead counsel in numerous securities fraud class actions nationwide, the firm has recovered hundreds of millions of dollars on behalf of injured investors and is active in major litigation pending in federal and state courts throughout the United States.
CONTACT INFORMATION
Lester R. Hooker, Esq.
lhooker@saxenawhite.com
Saxena White P.A.
7777 Glades Road, Suite 300
Boca Raton, FL 33434
Tel: (561) 206-6708
Fax: (561) 394-3382
www.saxenawhite.com