Good morning, everyone and welcome to the ProAssurance Conference Call to discuss ProAssurance’s results for Year-End and Fourth Quarter 2014. These results were reported in a news release on February 24, 2015. That news release and the Company’s other SEC filings, including its 10-K, also filed on November 24, 2015 will provide you with important information about the significant risks and other factors that could affect ProAssurance’s business and alter expected results. Also, management expects to make statements on this call dealing with projections, estimates and expectations and explicitly identifies these as forward-looking statements subject to applicable Safe Harbor protections. The content of this call is accurate only on November 25, 2015 and except as required by law or regulation, ProAssurance will not undertake and expressly disclaims any obligation to update or alter information disclosed as part of these forward-looking statements. Now I would like to turn the call over to Mr. Frank O’Neil.

Thanks Jason. Please note today that will be referencing non-GAAP items during our call. Our news release provides a reconciliation of those non-GAAP numbers to their GAAP counterparts. Participating in today’s call are Chairman and CEO, Stancil Starnes; Howard Friedman, the President of our Healthcare Professional Liability Group; Chief Financial Officer and Executive Vice President, Ned Rand; and Mike Boguski, the President of our Workers Compensation Business Eastern Alliance Insurance Group. I’d like to Stan to offer some opening thoughts. Stan.

Thanks Frank and thanks to everyone who's taking the time to be with us this morning. Our call today wraps up a strong quarter and gives the opportunity to both recap the successful 2014 and look ahead to a pivotal 2015. Some of the highlights – the return of a record amount of our capital to our investors, a record level of premiums written, the successful integration of our Eastern acquisition, and equally successful launch of Syndicate 1729 at Lloyd's in which we have a significant investment. I'll discuss the numbers behind those today. Also highlight some of the important initiatives that we think will play a substantial role in the successful 2015 and beyond. Frank.

Thank you, Stan. Howard Friedman, the President of our Healthcare Professional Liability Group will cover both Specialty P&C and Lloyd segments. Howard.

Thanks Frank. In Specialty P&C gross premiums written declined 11% in the quarter and were down about 6% for the year. The decline was entirely in healthcare professional liability. Both medical technology and life sciences and our legal professional liability lines ended the year with premium growth. Physician consolidation particularly into hospital-based insurance programs remains the greatest single marketplace factor in a healthcare professional liability portion of this segment. We also deal with ongoing competition among the traditional insurers due to the continued relatively benign loss environment and the amount of capital in the industry. That said, we were able to maintain our retention for medical professional liability business. We were able to marginally increase pricing on renewing physician accounts. And were able to win new business. In 2014 we added $ 16 million of new physician professional liability business and another $7 million in other healthcare liability. Medical technology and life sciences and our legal professional line added another $10 million of new premium. We see all of that as a positive an endorsement of our strategy to build a platform that serves the liability needs of the broadest spectrum of healthcare delivery. Specifically renewal pricing in the segment was favorable. With the largest component physician renewals up 1% in the quarter compared to a 1% decline in the fourth quarter of 2013. For the year physician renewal pricing was 1% higher as compared to flat for the full year 2013. Retention in the physician book was 90% in the quarter, a one point increase over the year ago quarter. Retention for the full year was 89% in that book unchanged from 2013. Let me go back to premiums for a minute. Like gross premium net earned premium decreased quarter- over-quarter and year-over-year which somewhat counter intuitively reflects the…

Thanks Howard, I know that was a lot to cover but it might make some sense now to have you touch on the results from the Syndicate 1729. I'm going to let Howard catch his breath for a second and remind you that there are participation in Syndicate 1729 which began operations January 1 of 2014 is 58%, we are reporting on a one quarter lag with the exception of investment results associated with our funds on deposit with Lloyd's which are held as an investment here and or an investment in certain U.S. based administrative expenses. So Howard what else can you tell us?

Well We all know that the global reinsurance business is soft now and while Duncan Dale and his team are seeing a high level of submission activity, the underwriting discipline that is inherent under Duncan's leadership means that the business is growing a bit more slowly than initially projected, although we are confident in the profit ability of the business being written. The Syndicate is seeing a solid flow of submissions which we think is encouraging for a startup. And the level of expenses is consistent with our expectations. So we remain encouraged with our investment. Our 58% share of Syndicate 1729’s gross written premium for the quarter was $7 million and was $34 million through December 31. The mix of business is approximately 64% casualty reinsurance, 18% property catastrophe reinsurance, 13% direct property coverage mostly in the U.S. market, and the remainder is a bit reinsurance again mostly in the U.S. Looking ahead to 2015 Syndicate 1729 has been allocated a maximum capacity of approximately $117 million of which we have a commitment for up to approximately $67 million. Frank.

Thank you Howard. Next comments we’ll hear will be on worker’s compensation and those will come from Mike Boguski, the President eastern. Mike.

Thank you Frank. This was another solid quarter and year for eastern. The worker’s compensation segment benefited from improvements in the overall economy during 2014. We were pleased with the continued growth and payrolls favorable production results across all operating territories and the consistent loss trends in the traditional book of business. We were pleased of production results throughout 2014 which continued in the fourth quarter. Gross premiums written in workers compensation were $44 million and direct premiums written were $42 million for the three months ended December 31, 2014, which included premium renewal retention of 83.4% and new business writings of $7 million. Renewal rate pricing was relatively flat and auto premiums were 426,000 during the quarter. Direct premium written were $218 million for 2014, the workers compensation calendar year net loss ratio 68.2% in the fourth quarter. It’s important to note the key difference between Eastern traditional and alternative markets business which is our segregated portfolios sale business house with an Eastern rig. There were some medical severity related claim activity in the fuel of our segregated portfolio sale programs during the quarter. However, this is a limited effect on our segment results because of the third-party ownership interest of the sale business. In our traditional workers compensation business the calendar net loss ratio remain relatively flat at 66% reflecting favorable frequency in severity claim trends. The combined ratio for the year was 96% including 2.7 percentage points of intangible asset amortization and 1.4 points of non-recurring expenses, primarily related to ProAssurance’s acquisition of Eastern. One of the sustainable competitive advantages of Eastern is our proactive approach to closing claims and 2014 was no exception. At year-end there were just 12 open claims in our traditional book of business net of reinsurance for accident years 2007 and prior. In addition, we were successful in closing 59.7% of 2013 and prior claims during 2014. We were pleased with the progress on our 2014 strategic plan including continued focus on profitable organic growth, healthcare market segment expansion, geographic diversification, cross-selling initiatives and successful integration into the ProAssurance family of companies. We are very proud of the consistent operational and financial track record as well as the reputation we have earned in the workers compensation insurance business over the past 17 years. Frank?

Thank you, Mike. Now we’ll turn to Ned Rand our Chief Financial Officer for discussion of corporate and consolidated results. Ned?

Thanks Frank. Let me quickly hit a few highlights from our corporate segment. This segment brings together a number of unrelated activities and is best to look at them individually. Starting with operating expenses, remember last year our fourth-quarter had some significant costs associated with the start up of Syndicate 1729 and to a lesser degree cost associated with what was then the upcoming purchase of Eastern. For the full-year operating expenses in this segment are down for similar reasons. Going forward you can expect to see some changes in this line item as we are reorganizing how we charge corporate expenses to our various lines of business. And this will result in more expenses captured here and less allocated to our Specialty P&C segment in particular. This segment also captures virtually all of our investment activities. And for the quarter net investment income was up $2.6 million and this is being driven by the performance in the quarter of several of our alternative investments. As we have discussed in the past, returns on these investments are more volatile than in our core fixed income portfolio. On that portfolio, our income was down approximately $2 million largely driven by lower portfolio balances. For the year the income from the core portfolio is down $11 million and this is offset somewhat by $6 million increase in our alternative investments and a $1 million increase in income from our equity investments. The decline in the equity and earnings of unconsolidated subsidiaries is driven by results from the fourth quarter 2013 versus 2014 You may recall that we had an $11 million benefit in the fourth quarter last year related with the change in accounting treatment of one of our investments. Turning to consolidated results, the growth and gross written premium for the…

Thanks Neb. Stan some final thoughts from you.

Thanks Frank. I mentioned at the outset that we regard this as a typical year for ProAssurance. We have put in place foundational strategies that have built a company that is uniquely situated to provide the broadest array of professional liability and workers compensation insurance to the healthcare market on which we are focused. We're already seeing results from that strategy. I'm confident that we have the right people and the right business plan to leverage our experience and expertise, our geographical reach, and especially our financial strength. And on that subject I would like to leave you with a few facts about how our long-term strategy and focus comes to benefit our policyholders and shareholders alike. Since July of 2007, when this senior management team came together, shareholders equity has almost doubled to over $2 billion and during that same time period we have returned over another billion dollars to shareholders through buybacks and dividends and we have to deployed more than $750 additional million dollars to acquire businesses that have put us in this unique position to serve our customers. I doubt there is number specialty insurance company of any size that can match that track record. It's a track record we are all proud of and one we are confident we can build on going forward. Frank let’s take questions.

All right, Jason if you will open the line for questions. We would be happy to take.

Thank you. [Operator Instructions] We’ll go first to Amit Kumar at Macquarie.

Amit.

Thanks. Hey thanks and good morning and congrats on another strong quarter. Just maybe a few quick questions, maybe I will start with the discussion on capital repatriation, capital management and obviously it was very strong in 2014. Based on the – I guess between the opportunities you laid out and the remaining buyback. How should investors think about that is it more opportunistic at this point or does it still remain strong for 2015?

Amit we are – our board looks at capital at every meeting the primary advantage of our capital management strategy is that we are very flexible. Ned can provide you some of the specifics with it, but we want to retain enough capital to conduct our business. We want to retain enough capital to grow our business. We want to retain enough capital to provide long-term financial strength to our policy holders and we evaluated periodically. We also want to retain enough capital to take advantage of acquisition opportunities that come along and we are confident that we are in a position to accomplish all of that, but with the strategy that our board is laid out. As you know the transactional opportunities are quite episodic. One has to be in a positioned to act when they come along you can’t make them happen we never go anywhere uninvited and we take all of that into account in our board particularly looks at it very strongly at each meeting as we think about where we are from a capital standpoint. Ned anything to add to that?

I think Stan that really sums that up well and kind to your question about the phase maybe buybacks. We are very sensitive to the price of our stock as we discussed before, we believe we have as Stan mentioned sufficient capital on the books today to take advantage of any opportunity we see it’s a fluid assessment and we’ll evaluate that every quarter in light of any profit that emerge out of the business.

Got it. And just out of segue into discussion on consolidation and you're talking about consolidation and obviously you've played a phenomenal role in integrating some of the recent acquisitions if you will. However I wanted to flip the discussion – there is been a broader trend towards industry consolidation you’ve seen Bermuda space being quite active. Do you get the sense that broadly there would be any change I guess in the interest levels for evaluating specialty franchises such as ProAssurance at this point or has a broader discussion trend remained unchanged?

Amit that is something that's probably way above my pay grade. A lot of people - you hear all the chatter that you are talking about. Our board and our management team is very focused on executing the strategy we have in place and I can tell you as a member of our board that we're very confident that the most compelling strategy available to us is represented by the course we're on. What happens outside the world of ProAssurance is not something we have any control over and frankly it's not something we pay a lot of attention to, we're very focused on executing the strategy that we have in place and we're very confident in our ability to provide a meaningful returns to our shareholders and extraordinary protection to our policyholders.

Got it. And just finally and thanks for the color on the loss cost trends and the MLP business. Broadly would it be fair that I guess the interplay of retentions pricing and competition will remain stable for 2015? Or do you see any sort of warning signs on the horizon?

Hi, Amit, it’s Howard.

Hey, how are you doing?

Good, thanks. Nothing imminent. We continue to see pretty much the same type of marketplace as we've seen for the past couple of years of which as you could see in the numbers were retention and pricing and lost cost trends have basically been pretty stable for the past of couple of years as well. So, right now nothing that indicates any significant change in that, we look at all of our data quarterly and obviously we're monitoring the market as we see things happen most on a daily basis but nothing on a horizon.

Got it, thanks. Thanks for all the answers and good luck for the future.

We’ll take our next question from Paul Newsome with Sandler O'Neill.

Good morning and congratulations on the quarter and year. I had a couple of questions. One was I was a little bit confused and I'm easily confused about – the comments about the decline in the medical liability business. I think you said that there's been essentially stable retention but the business shrunk quite a bit. Maybe this is a measurement issue. When you think about retention are you excluding the impact of what happens when a client essentially disappears because of consolidation?

No. In fact we measure every which way somebody leaves us and it's all included in our retention numbers. But when we run roughly 90% retention and more or less flat rates maybe up a 1% in a quarter down a 1% in a quarter, we’re going to see that kind of compounded effect there of 88%, 89%, 90%, 91% of the expiring premium being renewed. And then of course that gets offset by new business, but new business is difficult to come by at least new business that meets our profitability requirements. So you can run through the numbers and we do this to test our various reports to look at the effect of the combined retention pricing new business and how that translates into premium quarter-over-quarter or year-over-year. I guess you could say the factor that would determine the ultimate change is how much new business gets added, because again if we are running 88% to 90% on expiring business you have to offset that loss every quarter, every year.

So I mean just I understand the simple math essentially you are loosing about 10% of your customer base which is kind of actually a low level through retention…

Paul, one clarification, we are talking about retention, we're basing it on premium because if you just do it on the customer base you might have an Allied Healthcare professional paying a 1000 versus neurosurgeon paying upwards of 40 or 100,000, so we measured on premium, because it’s a better relationship.

And that makes perfect sense to me, but it looks like your premium in that business was down double-digits, if you didn’t sell any policies then you could claim it all on retention and pricing would have had essentially minimal impact either way, but you did have some new business and I guess that maybe I’m breaking the answers that just a mix shift it’s making the numbers that accounts for the difference between what you would have put on in your new business and what you didn’t getting the premium?

There is always a mix involved, but if you look at it for the year, we said that retention was 89% for the year and we said that physician renewal pricing which is the vast majority of it was 1% higher and for the year we were down 6%, so the difference there would be essentially the new business that we added otherwise it probably would have been down 10%.

Okay, that’s very helpful. Like I said I’m easily confused. My second question has to do with the Lloyd's business, can you talk a little bit about sort of not next year, but sort of way out. When does that business in your opinion get to escape?

I think for one thing it depends on the marketplace. That’s one of the biggest factors particularly with respect to the idea that it’s a new operation and because of the underwriting discipline that Duncan Dale and the team have underwriters that he has recruited have among themselves. The market at Lloyd's continues with the overall Lloyd's market, generally continues to expand as Lloyd's Bank more of an effort in promoting itself internationally and depending on the type of business, Syndicate 1729 expects to take advantage of that in varying degrees. It’s not right now a matter of not seeing the submissions or not being fully staffed, both of those things are happening, it’s really a reflection of what is out there that is worth writing, what the competition is, the Syndicate able to even when it quotes on certain accounts get the share of the account that it wants, because many of these programs are syndicated. So you might quote on something and authorize a 10% share and end up with the 3% share because of the amount of competition that is also quoting on it. I would think that from a pure scale perspective it will continue to grow and is expected to continue to grow, but I think a lot of it just depends on what the marketplace is.

No, no and obviously I think you are very smart in that - I've never heard of a company going bankrupt because of too high expenses they always go bankrupt because of losses, but I guess does the premium need to be double or triple the size to get to a point where your expenses are inline with what you would want from a profitability perspective? That's the question I used to get as apposed to the timing.

Yes, one thing to make sure you understand with the way that we've accounted for the Syndicate this year, we have not deferred any of the expenses given the start-up nature so we’ve been expensing everything while we’ve been earning the premium of our 12 months to 24 months period depending on the nature of the premium. You have got a bit of a mismatch in what's being reported on our results, it makes the expenses look heavier than they are. So that's a piece of it I believe. Our expectation is on a one quarter lag so first quarter of 2015 will be fourth quarter for them. And our expectation is that we will begin to see kind of those losses that we've seen in the Syndicate begin to moderate barring any unforeseen loss of that as we begin to capitalize expenses in the syndicate, and amortize them over that 12 months to 24 month period that the premium is earned.

Okay terrific that’s great. Thank you very much.

And we’ll go next to Howard Flinker with Flinker & Company.

Hello everybody.

Hey hi.

Ned you probably calculated the compounded return if you add back the billion dollars of payments to shareholders in dividends and buybacks. What would that be?

We have Howard, but I don’t have it with me, we can get that for you, but we have calculated, I just don’t have it here with me.

I'm sure you did.

Yes.

Without it is 10%, doubling in seven years is 10%.

Yes. Right.

And one other comment, ROI has a similar record.

Yes.

I think compounded 15%, and have done it for 30 years. So you better stick around for another 20 year or so.

I intend to Howard.

We will have a great call in 2035.

All right thanks.

Thank you. End of Q&A

[Operator Instructions] And at this time, we have no further questions. So I would like to turn the call back over to your speakers for any additional or closing remarks.

Well that’s it. We will next speak with everybody in May. We have two investor presentations coming up, one next week on Monday and the other later in March and we’ll have an announcement about those coming up and we invite you to participate there. Thank you very much.

This does conclude today’s conference. Thank you for your participation today.