Good morning, everyone. Welcome to the conference call to discuss ProAssurance's Results for the Quarter and Nine Months Ended September 30, 2015. These results were reported in a news release on November 4, 2015. The release, along with the Company's other SEC filings, including the 10-Q, also filed on November 4, 2015, are intended to provide you with important information about the significant risks, uncertainties and other factors that are out of the Company's control and 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 without the meaning of the US Federal Securities law and subject to applicable Safe Harbor protections. The content of this call is accurate only on November 5, 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. The management team of ProAssurance expects to reference non-GAAP items during today's call. The Company's recent news release provides a reconciliation of these non-GAAP numbers to their GAAP counterparts. Now, as I turn the call over to Mr. Frank O'Neil, I would like to remind you that this call is being recorded, and there will be a time for questions after the conclusion of prepared remarks. Mr. O'Neil, please go ahead.

Thank you, Kim. Participating with us in today's call are our Chairman and CEO, Stan Starnes; Howard Friedman, the President of our Healthcare Professional Liability Group; our Chief Financial Officer and Executive Vice President, Ned Rand; and Mike Boguski, the President of our Workers' Compensation business. And as is our custom, we're going to go to Stan first for some opening remarks. Stan?

Thanks, Frank. I want to thank you for joining us today to hear more about our results through the end of the third quarter of 2015. In many ways, this is a mirror of the second quarter for ProAssurance -- strong operating results in a very competitive environment, growth and growth premiums driven by Eastern and our participation in Syndicate 1729, and a continued emphasis on shareholder value through consistent dividends and the repurchase of shares. The real noise, if I can use that term is in investments, which created a difference between net and operating income in the quarter. All of that leads me to ask Ned Rand to begin our discussions. Ned?

Thank you, Stan. It might make sense to discuss the investment piece first, then spend the remaining time on operations, since those results are largely consistent with prior quarters this year. Net income for the third quarter was $10.3 million or $0.19 per share. That contrasts with operating income of $34.2 million or $0.63 per share in the quarter. As Stan mentioned, the difference is attributable to some rather sizeable swings in our investment results. During the third quarter, unfavorable equity market performance resulted in our recognition of a loss of $32.6 million in our equity trading portfolio. This was primarily related to broader market declines. However, $4 million of the loss was the result of a reduction in the value of an inflation-related investment, which declined due to lower inflation expectations. We also recognized investment impairments totaling $3.4 million for the quarter, primarily in the energy space. Net investment income was $26.9 million in the quarter, a year-over-year decline of 18%, primarily due to lower average investment balances resulting from our sustained capital management initiatives, as well as the lower-interest rate environment. The same factors affected net investment income year to date, which was $82.2 million, down 11% year over year. To end this discussion with some positive news -- our equity investments are up approximately 6% as of the end of October, having been down approximately 8% last quarter. And our high-yield investments, a large part of the unrealized loss of development in Q3, are now up approximately 3% since month end. As I mentioned, the investment discussion is a driver of much of the decline in net income for the quarter and year to date. Now, let's look at the consolidated operational results. Consolidated gross written premiums were $236 million in the third quarter, an increase of…

Thanks, Stan. We're going to go to Howard Friedman next, who has commentary for us on Specialty P&C and on the Lloyd's segment. Howard?

Thanks, Frank. In Specialty P&C, gross premiums written were $161 million in the quarter, a decline of 1.6% over the third quarter of 2014. For the nine months year to date, gross premiums written were $417 million, 3% lower than the same period in 2014. As Ned mentioned, the insurance lines within Specialty P&C are very competitive right now. So while we would like to see premium growth, we will not engage in destructive pricing to win or keep business. With that in mind, though, we did write $9 million of new business in Specialty P&C during the quarter. That was about $5 million in physicians, almost $2 million in healthcare facilities, and another $1 million each in medical technology and life sciences and legal professionals. So we are finding new insured to value the Company's financial strength and service philosophy. Year to date, we have written approximately $29 million in new business. There was virtually no change in the level of seeded premiums written in the quarter -- $19.7 million versus $20.4 million last year. Year to date, seeded premiums are $55.1 million, which is $4.8 million ahead of last year. And it's primarily the result of our session of podiatric premiums to Syndicate 1729. Net written premium for the quarter and year to date declined 1.3% and 4.7% respectively compared to 2014. Physician premium retention was 89% in the quarter and 88% for the year to date. Both represent a one-point decline from the comparative periods in 2014. However, pricing on our renewing physician business improved a point for the quarter and year to date as compared to last year. We're not seeing any change in the overall loss trends across our insurance lines in the specialty P&C segment. As noted for quite a while now, within the…

All right. And talk to us about Lloyd's.

Sure, Frank. Remember, we are reporting on a one-quarter lag with the exception of certain US-based administrative expenses and investment results associated with our funds at Lloyd's, which are held as an investment. Our 58% participation in Syndicate 1729 resulted in $16.4 million of gross premiums written in the quarter, 168% higher than the same reported quarter last year. For the nine months ended September 30, our share of gross premiums written was $46.9 million, a year-over-year increase of 75%. Much of the increase can be traced to the fact that we are reporting three quarters of results in 2015 against two quarters in 2014. But the maturation of the syndicate and the fact that staffing has ramped up since last year has also allowed more business to be underwritten. Underwriting expenses for the reported quarter were $5.6 million and were $13.2 million for the reported nine-month period, increases of 118% and 120% respectively. These increases were expected as the syndicates business expands and staffing reached desired levels that allowed us to attract and underwrite a wider range of risks. As premiums have increased, we have also seen the expected decrease in the underwriting expense ratio. For the quarter, the underwriting expense ratio was 47.4%, a decline of almost 28 points compared to last year. For the nine months, the underwriting expense ratio was 49.2%, a decline of almost 45 points. The growth of the syndicates business also means increased claims activity. Our net losses and LAE were $8.7 million in the quarter, up from $2.5 million in the same quarter of 2014. For the nine months, net losses and LAE were $18.3 million, up from $4.4 million in the same period last year. Please recall that we are using Lloyd's historical data for similar risks to establish our expected loss ratios, which are little changed from the same period last year. We will be able to place a greater reliance on the syndicate's own loss experienced as the business matures. The year-to-date mix of business in the syndicate has changed somewhat due to seasonality, not the change in strategy. Approximately 52% of the syndicates business is casualty reinsurance, down from 68% in the last reported quarter. Property catastrophe reinsurance accounts for approximately 19% of premium, up from 11%. Direct property coverage is 25%, up from 19%; and property reinsurance comprises 4% of the risk, up from 2% last quarter. The majority of the syndicates business remains US-based. Duncan Dale continues to report a strong flow of submissions and also continues to exercise restraint in writing business, to ensure the syndicate's future success, which is entirely consistent with our expectations. Frank?

Thank you, Howard. Next, we're going to go to Mike Boguski, who is the President of our Workers' Compensation writer, Eastern. Mike?

Thank you, Frank. Consistent with prior quarters this year, the increase in Workers' Compensation operating results were driven by consistent production in all of our operating territories, higher earned premiums, and our ongoing attention to expense management, partially offset by a slight increase in the current accident year net loss ratio in our traditional business due to severity-related claims in the quarter. Gross premium written increased to $62 million in the quarter compared to $60 million in third quarter of 2014, an increase of 3%. Renewal pricing increased 1% in the third quarter despite competitive market conditions, and new business production was $10.5 million. Premium retention was 79% for the quarter compared to 85% for the third quarter of 2014. The decrease in retention reflects increased competition across all operating territories and the conversion of two guaranteed cost accounts to large deductible policies. We were successful renewing the available alternative market programs during the third quarter. The increase in the third quarter 2015 accident year loss ratio in our traditional business was primarily related to an increase in severity-related claims. There were three reinsured claim occurrences in the third quarter of 2015, compared to no reinsured claim occurrences in 2014. During the first nine months of 2015, we were successful in closing 51% of 2014 and prior claims, which is a six-point improvement over the prior-year closure rate. Favorable reserve development was $1.2 million in the quarter compared to $600,000 in the third quarter of 2014, primarily related to alternative markets business; but also includes $400,000 in both periods relating to the amortization of purchase accounting fair value adjustments. The decrease in the third quarter 2015 traditional expense ratio reflects growth in net earned premium and prudent expense management strategies. This reduction was partially offset by the implementation of a corporate management fee in the first quarter of 2015. The combined ratio for the quarter was 95.9%, including 2.4 percentage points of intangible asset amortization and 8/10 of a point from the initiation of a corporate management fee. Frank?

Thank you, Mike. Stan, will you give us some final thoughts, please?

Sure. I want to stress a few dominant themes about our business and our strategy. I am immensely proud of our employees and our partners in the agent and broker community. It is through their efforts that we have produced sustained strong operating results over a period of many years. The service and security our people and distribution partners deliver to our policyholders clearly sets us apart. And that allows us to succeed in the marketplace. That in turn allows us to continue creating value for our shareholders. We have a remarkable track record in this regard, having grown shareholders' equity from $1.2 billion to $2.0 billion since July 2007, when this current management team came together; and doing that while at the same time returning $1.3 billion to shareholders in the form of buybacks and dividends. We have the financial strength, the geographic reach, and an unmatched suite of products and services that will allow us to continue to respond to the needs of organizations and individuals who are on the cutting edge of healthcare. I am confident in our strategic vision for the future and what that means for our shareholders and insurers. We look forward to answering your questions about the quarter and the future. Frank?

Thank you, Stan. Kim, if you'll open the line, that concludes our prepared remarks, and we're ready for questions.

[Operator Instructions] Our first question is from Amit Kumar from Macquarie.

Thanks. Good morning, and congrats on the quarter. Two quick questions - the first question is on the med mal book. You obviously talked about - and we've talked about the discussion on merger of customers into larger entities, the loss of larger accounts. Has that trend remained fairly stable? Or has that trend accelerated?

Howard, why don't you go ahead.

It's Howard. I'd say, Amit, that the trend is stable but certainly continuing. In other words, we're still seeing the consolidation take place. I wouldn't say it's happening at an accelerating rate. Physicians are forming larger groups in order to have more negotiating power with hospitals and health insurers, and also to spread some of the additional fixed cost of electronic health records and other regulatory burden throughout their practice. Hospitals, likewise, are trying to consolidate for many of the same reasons -- reduced reimbursements, trying to gain efficiencies, and more negotiating power. It varies by region, certainly. And that has been the case really since this trend began 10 years ago or so. We saw more of it in the Upper Midwest initially; we see a little bit more now in some other parts of the country. But it's a continuing phenomenon.

Got it. That's actually helpful. The second question I had was -- this might be for Mike, on comp -- can you talk a little more about these three claims? And, I guess, how should we be thinking about the loss cost trends going forward?

The three claims in the quarter were retention claims, so above our $500,000 retention. Two of the three reinsured claims were from workers with lengths of employment less than one year. And you tend to see that trend -- as the economy recovers and our insureds start to hire less experienced workers, you tend to have some severity. I will say over time, you're comparing that severity to what I would describe as a very, very low historical claim severity for the workers' comp business over time. The other thing that I would mention is that those claims were all in our Mid-Atlantic region and were longstanding profitable customers. Matter of fact, one of the claims was from an insured that was our fourth policy written back in 1997 and is an 18-year customer. So we're very comfortable with the customer base that had the severity. And I would also say that the rest of the book has performed very, very well. And our underwriters are continuing to do a very good job pricing for severity.

Got it. And just, I guess, switching gears, and final question, on Lloyd's -- it's on a one-quarter lag -- was there any noise in Q3 which would be reflected in Q4 results? Or how should we think about that?

In terms of the premium itself, it's seasonality that you're seeing in the variation of when the various lines of business tend to renew. Property tends to be more in the spring-summertime period. But I'm not sure if that's what you're asking.

No, I was more asking about any losses, et cetera -- are those recognized immediately, and the premiums have the lag? Just based on the losses we've seen in the third quarter, could there be any noise in the Q4 reported numbers?

Amit, hey, it's Ned. If we had a material loss that had occurred in their third quarter, we'd have brought it into this quarter. We're reporting losses on the same lag, but we do a look-ahead to see if there's anything material impacting the quarter. And had there been anything at this point that we thought was material, we would've gone ahead and recognized that in the current quarter.

Got it. Because we had the cat reinsurance fee, that's what I was asking. That's all I had. Thanks so much for that clarification, and good luck for the future.

[Operator Instructions] We’ll go next to Ryan Byrnes from Janney.

Thanks, good morning everybody. Just looking to get a little more color on the rate filings and some of the medical malpractice, I guess, competitors of yours. Just wanted to see the magnitude, and also if it's nationwide or certain states. Just wanted to see if I could get a little more color there.

Yes, the magnitude is not great. Most of what we're seeing in terms of increases that are being filed -- and it's certainly not uniform that all the filings are for increases, but most of them are single digits, maybe even low single digits. It's just a little bit of a change from what has been the norm over the past several years, where generally almost everything that you saw was either a decrease or zero, just with maybe a redistribution of classifications or territories. And no, it's not, I wouldn't call it, in any type of pattern. We're not seeing it in a particular state or region. It's just that we have noticed it, and it's also been in some publications that there are rate filings that are looking for rate increases in MPL.

Okay. Great.

Howard -- the difference between filed and charged.

Well, sure. As I mentioned in the earlier remarks, just because you see a rate increase being filed, there's still a lot of latitude in the filings for credits and discretion. And so it may be reestablishing or trying to establish a little higher baseline, but it might not change the price on the street.

Okay, great. Thanks for that. And then, just moving to Ned quickly on the taxes -- so again, it looks like you guys are increasing your investments in historical tax credits. And that's having an offsetting impact on lowering the overall tax rate. Is that the right mechanics to think about it? And just wanted to see, again, how that should impact -- what that impact will look like going forward.

Yes, Ryan, that is the right way to look at it. So historically, we have invested in low-income housing tax credits. But starting this year, you're also seeing the historic tax credits. The big difference with the historic tax credits is they turn around much faster. So they turn around in a 12- to 24-month period. So the investment we're making, we'll see it turn around. We're seeing part of it happen this year, and we'll see a good bit of it happen next year. Whereas the low-income housing tax credits have a much longer lifespan.

Great. Thanks for that.

[Operator Instructions] It appears there are no further questions at this time. Speakers, I’ll turn the conference back over to you – I take that back. I do have one more question, comes from Paul Newsome from Sandler O'Neill.

Good morning. Thanks for the call. Just a really quick follow-up on the credit tax rent. Are you thinking of that, one service separate business? And two, is it something that you have as a -- do you have a size that should be sort of, in a targeted world, relative to earnings or relative to capital? Or how do you think of sort of the magnitude of how big or small you want to be involved with this sorts of -?

Hey, Paul, it's Ned. We don't view it as a different business. We view it as an asset class within our investment portfolio. And it's an asset class that we got into kind of following the financial crisis, where the historic buyers of these tax credits, particularly the low-income housing tax credits, were largely not present in the marketplace while the supply continued. And so there was a real opportunity to get some pretty substantial returns on kind of a tax-equivalent return basis. So that's what drove us into them. It was somewhat opportunistic. Those return -- most of the buyers have returned. And so the market is not attractive as it once was. And so I think it's unlikely that we will add significantly to the portfolio that we have today. We're more likely to allow that portfolio to run off, and as we evaluate alternative asset classes that we think have higher return potentials.

Did the volatility in the last quarter's results in any way make you think differently about how you would invest your investment contract?

No. Did not.

Fair enough, thank you. Congratulations.

And we have another question that comes from Greg Peters from Raymond James.

Good morning. Thank you for call and taking my question. There has been, and I guess continues to be, a substantial amount of consolidation among independent insurance agents in this country. And I guess as it relates to ProAssurance, I'm wondering if there's been any shift in the sources of business in recent quarters relative to history. And more importantly, as we look forward, how does it affect your strategic vision and how you want to continue the business?

Greg, it's Stan. I'll let Howard or Mike add any color they care to add to this. Except for those states where we historically have been direct writers and that would be Alabama and Florida, for the most part. We have great relationships with our agents and brokers through all the lines of business. And those relationships are very important to us. As more and more healthcare is delivered by larger and larger organizations, I think we have seen and will continue to see the distribution patterns evolve accordingly. And that is, as you get a larger and larger organization, you tend to get a bigger agency and then move toward the brokers, who will become an increasingly important part of the distribution channel. I think those changes will be incremental. I don't think it'll be any overnight change. And I think it's certainly something that's going on within the healthcare space. And as we continue to insure more and more of these larger organizations, I think we'll deal with brokers at an increasing level. But the individual physician is not going to disappear, the small group practice is not going to disappear; there are just going to be fewer of them. And for that reason alone, the smaller neighborhood agencies and local agencies are not going to disappear. And they'll continue to remain a very important part of what we do at ProAssurance, just as the solo practitioner will continue to be a very important part. What distinguishes us from most of the people in this business -- as you know, it's a very fragmented business -- is we have the ability to provide products and services across a broad geographic pattern within the United States to all sizes of healthcare providers, be it the solo practitioner or the very large healthcare system. That's the reason Ascension came to us, for example -- to start the Certitude program. And Ascension, as you know, is the largest Catholic healthcare provider in the world and the largest nonprofit in the United States. So that's a long way of saying that I think we will continue to treasure and rely greatly on our relationships with the traditional agent in the MPL space. But we'll also have opportunities to work with brokers on an increasing basis, simply because larger and larger integrated organizations are delivering more and more healthcare. Howard, anything to add to that?

No, nothing to add on the healthcare side.

Mike, anything on the comp side?

No further comments. Thank you.

Good. Greg, did that answer your question?

It does. Just as a follow-up -- it's my view, or at least my understanding of your company, that the percentage of business coming from the brokers historically has been very low. I assume that continues to be the case today. So I was wondering - yes, go ahead.

Yes. On a comparative basis, we obviously distribute or receive the distribution of more premium through our traditional agents than brokers. But the broker relationships are growing. And we have relationships with brokers that we would not have had six or seven years ago. And we see that increasing as we get more and more submissions from brokers.

Just one other follow-up -- I suppose some of the local agents that you deal with go through their various business cycles, and some of the agencies come up for sale. I suppose it's possible that ProAssurance, because of the capital position, could consider buying some of these agencies and, in a sense, turning an independent agent model into a direct model. Have you given any thought to that? Have you executed on any of those type of opportunities? Or am I just going off the ranch here?

You're sort of getting off the ranch, I think. We have an agency at ProAssurance that helps us service our insureds. But I don't see us getting in the agency or brokerage business. We are very loyal and very faithful to our agency partners and have no desire to compete with them. They do what they do in a way that is very worthwhile to their customers and their insureds. And we are pleased with our business, which is the underwriting and risk-taking business. And we're not in the distribution business.

Greg, one note I'd add on that - yes, sorry. One note I'd add on that is -- what we have done in the past on a periodic basis is provided the financing behind some of the agency consolidation with some of our agency partners. So we view that in the context of our investment portfolio and have our investment folks very involved in structuring and pricing it, if we do that – still to be relatively small. But we have helped facilitate some of those transactions if we think it's an important relationship, which is built sort of loyalty to us.

Yes, that certainly makes a lot of sense. Well, listen, thank you for your answers.

[Operator Instructions] And it appears there are no further questions at this time. Speakers, I'll turn the conference back to you.

That concludes our conference call. And I guess we speak to you next in the new year. I hope everybody has a wonderful holiday, and we will speak to you in late February.

And that does conclude our conference today. Thank you all for your participation.