The law firm of Kirby McInerney LLP announces that a class action lawsuit has been filed in the U.S. District Court for the Northern District of Alabama on behalf of those who acquired ProAssurance Corporation (“ProAssurance” or the “Company”) (NYSE: PRA) securities during the period from April 26, 2019 through May 7, 2020. Investors have until August 17, 2020 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
The lawsuit alleges that the Company 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; and (ii) ProAssurance failed to properly assess a large national healthcare account that experienced losses far exceeding the assumptions made when the account was underwritten.
On January 22, 2020, ProAssurance disclosed a $37 million charge to its loss reserves for the fourth quarter of 2019 due to “deteriorating loss experience, driven by a large national healthcare account.” On this news, the price of ProAssurance shares fell $4.18, or 11.1%, to close at $33.40 on January 23, 2020. On February 20, 2020, ProAssurance revealed that the charge was actually $51.5 million, not $37 million.
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. On this news, the price of ProAssurance shares fell $4.38, or 21.5%, to close at $15.95 on May 8, 2020.
If you acquired ProAssurance securities, have information, or would like to learn more about these claims, please contact Thomas W. Elrod of Kirby McInerney LLP at 212-371-6600, by email at firstname.lastname@example.org, or by filling out this contact form, to discuss your rights or interests with respect to these matters without any cost to you.