Frank O'Neil - Senior Vice-President, Chief Communications Officer Stancil Starnes - Chairman, Chief Executive Officer and President Howard Friedman - President, Healthcare Professional Liability Group; Chief Underwriting Officer and Chief Actuary Ned Rand - Executive Vice President, Chief Financial Officer and President of Medmarc Insurance Group Michael Boguski - President, Eastern Insurance.

Mark Hughes - SunTrust Robinson-Humphrey Company, LLC Amit Kumar - Macquarie Group Paul Newsome - Sandler O'Neill Ryan Byrnes - Janney Montgomery Scott.

Good morning, everyone. Welcome to the conference call to discuss ProAssurance’s results for the third quarter of 2016. These results were reported in a news release issued on November 2, 2016 and also in the company's quarterly report on Form 10-Q, also filed on November 2.

These documents 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.

Further, we caution you that management expects to make statements on this call dealing with projections, estimates and expectations, and explicitly identify these as forward-looking statements within the meaning of the US federal securities laws and subject to applicable Safe Harbor protections The content of this call is accurate only on November 3, 2016.

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 approach 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 the call is being recorded and there will be time for questions after the conclusion of prepared remarks..

Thank you very much, Dino. Our apologies to everyone on the call for the delay. On our call today are 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; Michael Boguski; the President of Eastern, our workers’ compensation.

Stan, will you please kick off the call with some opening thoughts..

Thanks, Frank. And my thanks to everyone participating for taking to be with us today. When we announced preliminary earnings last week, we emphasized our confidence in our business and our strategic vision.

You’ll hear in this call about successes that convince us that we are succeeding by delivering a level of service and innovation that is winning in the marketplace and helping us deliver real value for our investors. In our announcement, we called out a few key items that affected the quarter.

I'm going to ask Howard and Ed and Mike to explain those in greater detail to begin the call.

Howard, will you go over development for us?.

Sure. Thanks, Stan. First, I want to underscore that we did have favorable development this quarter of $29 million. Breaking that down, we recognized $30 million of favorable development in specialty P&C and $1.8 million of favorable development in workers’ compensation.

This was slightly offset by a reduction to previously recorded favorable prior-year development in our Lloyd’s segment due to a change in methodology.

The Syndicates business is generally reinsurance or primary insurance written through entities with binding authority, which means initial loss estimates are based on estimated exposures and are trued up as the actual exposure and premium information as received.

Prior to this quarter, we have been taking those premium estimates and applying an expected loss ratio as we do on our other lines of business.

Thus, as actual premiums were reported and earned, the application of that initial loss ratio could produce what is essentially artificial loss development on an accident year basis, either positive or negative. This methodology works well at Lloyd’s where results are reported on an underwriting year basis.

When converting the underwriting year results to an accident year basis, the question of how to consider these changes with respect to current year versus prior-year losses becomes an issue. In part, that's what occurred last quarter when we recognized approximately $2.8 million of favorable reserve development from the Syndicate.

Much of that, however, was due to a reduction in exposure estimates rather than a reduction in loss estimates on actual incurred losses. ProAssurance needs to report these results on an accident year basis. So, we have separated the two calculations.

Changes in losses that result from revised exposure estimates will be reported in the current period as premium is earned. Changes in losses that result from revised estimates on previously incurred losses will be reported in the accident year of the loss itself.

The result of applying of that methodology to the Syndicate’s reserves essentially reverse the favorable development from last quarter in the Lloyd’s segment. The takeaway from this is that overall losses do not change, just the categorization into current and prior periods.

We’re confident in the adequacy of reserves within Syndicate 1729 and we believe this will be a more transparent way of reporting to the investing community.

A final comment here, the reduction to previously recorded favorable prior-year development is one of the primary factors, along with taxes in the Lloyd’s segment’s operating results this quarter. .

The second item we mentioned was the loss in our investment in unconsolidated subsidiaries related to the accelerated recognition of our estimate of partnership operating losses related to our tax credit investments.

Remember, the amortization of the credits has a negative impact on our investment result that benefits us by reducing our tax liability. We make a good faith estimate of the amortization schedule and book accordingly.

In this quarter, we received new information on two credits and booked the catch-up number, which accelerated our amortization by $3.6 million. Importantly, these adjustments are timing related and do not indicate any change in the expected tax benefits we will receive from the related credits.

Mike?.

Thank you, Ned. The third item we mentioned related to an increase of $530,000 in state assessments, driven primarily by three states, which based those assessments on reported and/or paid claims. These assessments were one of the primary drivers in the increased Workers' Compensation segment expenses in the quarter.

You may recall that we had higher severity claims in prior periods in those states, which contributed to the increase in the assessments incurred this quarter. The other states in our core operating platform based assessments on premiums, which results in a more predictable methodology for estimating costs.

Frank?.

Thank you, Mike. Let’s go back to Ned now for a review of financials from the quarter. .

Thanks, Frank. Gross premiums written declined $3.9 million, about 1.6%. Gross premiums written in our Lloyd's segment were up $2.6 million, an increase of almost 16%. That increase was offset by declines of approximately 3% in both the specialty P&C and Workers’ Compensation segments. We’ll flush out the detail of those in later remarks.

Net earned premiums were fractionally higher, primarily driven by the Lloyd’s segment. Our coordinated sales and marketing efforts continue to bear fruit, producing about $1.9 million of new premium in the quarter and $9.6 million year-to-date, more than triple the results through three quarters in 2015.

I’ve already mentioned much of the detail on our tax credits. The other investments that we hold as investments in unconsolidated subsidiaries performed well in the quarter, with the result from these investments up $1.8 million over Q3 2015.

We continue to see pressure on net investment income that is the result of lower investment balances due to our capital return efforts over the past several years and the sustained low interest rate environment affecting the insurance industry in general.

Finally, in the quarter, we had $15.7 million of net realized investment gains, which represents a $52 million swing from the $36.6 million loss last year.

The consolidated current action year net loss ratio was 79.4%, essentially unchanged quarter-over-quarter as we saw a decrease of 14.9 points in our Lloyd's segment and 1.8 points in our Workers’ Compensation segment. These declines were almost entirely offset by a 2.5-point increase in the larger specialty P&C segment.

That increase in the specialty P&C segment is primarily due to changes in the mix of business and changes in our exposure base with the addition of complex risks, such as healthcare facilities.

The consolidated calendar year net loss ratio was 63.7% as compared to 59.8% in the third quarter of last year, primarily due to the lower level of net favorable development. Our expense ratio was 30.1%, a point higher than last year's third quarter.

This is primarily due to an increase in Workers’ Compensation operating expenses, resulting from the state assessments and higher compensation and related benefit expenses. Our tax expense for the quarter was $9.7 million, an effective tax rate of 22.2%, which is higher than in the first two quarters of the year.

There are two primary drivers of the increased effective tax rate. As previously mentioned, we recognized realized gains of $15.7 million in the quarter and the tax impact of these gains was approximately $4.3 million.

This quarter also includes $1.4 million of tax expense related to the Lloyd’s segment, due in large part to UK taxation of unrealized investment gains and implied foreign currency gains on our funds on deposit at Lloyd's. That account is denominated in dollars and is translated to sterling for tax purposes.

And the strengthening of the dollar against the pound during the year is a significant root cause. And finally, when we filed our 2015 tax return this quarter, there were some true-up amounts from prior projections, which had a tax effect of approximately $300,000.

Adjusting our these items, the taxes on our pretax operating income are $3.7 million and the effective tax rate becomes 13.2% for the quarter. Net income was $33.8 million or $0.63 per diluted share. Operating income was $24.4 million or $0.46 per diluted share. Our ROE improved to 6.6% for the quarter.

Book value increased to $38.38, an increase of $1.50 or 4.1% since year-end. At September 30, we have $251 million in unpledged cash and liquid investments outside our insurance subsidiaries and available for use by the holding company.

There were no shares repurchased in the quarter, given our share price and the payback timeframe we have discussed in the past. We do understand expectations with regard to managing our capital and we believe we've been responsible stewards of the capital entrusted to us.

Over the past three years, we've returned to our shareholders an amount equal to or exceeding our earnings and we continue to evaluate strategies for deploying our capital.

Frank?.

Howard Friedman will now circle back and we’ll ask him to discuss results in specialty P&C.

Howard?.

Thanks, Frank. I keep trying to come up with a new adjective to describe the state of the market, but fiercely competitive seems to sit best. I do not want to minimize the $4.7 million quarter-over-quarter decline in the top line, but I am encouraged by several things.

First, let’s acknowledge that physician premiums declined $8 million quarter-over-quarter, largely due to competitive pressure and the effect of 24-month-old policies, which produce a normal decline in premium in even-numbered years because of their renewal pattern.

Offsetting that decline was a quarter-over-quarter gain of $3.3 million in healthcare facility premium as we have focused increased energy on penetrating the facility in complex risk market. We are seeing increased success. And I would note that we wrote $10.1 million of new business in the specialty P&C in the quarter.

Our premium retention in the physician line, the largest component of the segment, was 89%, unchanged from prior quarters. Pricing on renewing physician business, a key benchmark for us, was 1% higher than last year's third quarter. Our current year net loss ratio was 88.1%, 2.5 points higher than last year’s third quarter.

This is primarily due to our decision to book quarterly legal defense costs and ULAE at levels more representative of what we expected year-end and due in part to the increasing amount of facility business that are writing. As Ned mentioned, we book a higher initial loss ratio for that business.

The calendar year net loss ratio was 62.2% and was affected by the marginally lower amount of favorable development I mentioned at the start of the call. That had a corresponding effect on the combined ratio for the segment. With regard to the loss climate, we don't see any change in overall loss trends.

Frank?.

Thank you, Howard. Now, let’s bring back Mike Boguski for comments about Workers’ Compensation.

Mike?.

Thank you, Frank.

The Workers’ Compensation segment 2016 third quarter operating results decreased compared to the same period in the prior-year, driven by a decrease in net premiums earned in our traditional workers’ compensation business and an increase in underwriting expenses, partially offset by an increase in the operating results of our equity-owned segregated portfolio cell business.

Gross premiums written decreased to $59.9 million for the three months ended September 30, 2016 compared to $61.8 million for the same period in 2015, a decrease of 3%. This reflects an increased level of competitive market pressure across all operating territories.

Premium retention was 83% for the quarter compared to 79% in the third quarter of 2015. Renewal pricing decreased 3% during the quarter as a result of competitive market conditions. New business lines were $6.8 million during the quarter compared to $10.5 million in third quarter of 2015. Audit premium was $1.5 million for the quarter.

We successfully renewed both of the available Alternative Market programs during the quarter. Alternative Market premium retention was 88% for the three months ended September 30, 2016.

The decrease in the accident year loss ratio for the three months ended September 30, 2016 is driven by improved loss experience in our Alternative Markets business, partially offset by a 1 percentage point increase in our traditional accident year loss ratio.

Favorable reserve development was $1.8 million in the quarter compared to $1.2 million for the third quarter of 2015, primarily related to Alternative Markets business, but also includes $400,000 in both periods related to the amortization of purchase accounting fair value adjustments.

Claim closing patterns continued to be consistent with prior periods. We successfully closed 46% of 2015 and prior claims during the first nine months of 2016.

The increase in the underwriting expense ratio for the three months ended September 30, 2016 compared to the same period in 2015 reflects increases in compensation and related benefits as well as the previously mentioned state assessments.

The 2016 combined ratio of 96.9% includes 2.4 percentage points of purchase accounting adjustments and 0.8 points of a corporate management fee.

Frank?.

Thank you, Mike. We will go back now to Howard for a discussion of our Lloyd's Syndicate.

Howard?.

Thanks again, Frank. There’s a lot of positive momentum from the Syndicate. I’ll remind you that our participation is 58% and results are reported on a one quarter lag. As mentioned earlier, gross premium written grew 16% to $19 million in the quarter.

Of note, the International Healthcare Professional Liability team that joined in the first quarter has hit the ground running and is writing business in many of its former markets using the Syndicate’s pricing and underwriting guidelines. Net earned premiums were up 22% at $14.6 million, which reflects the continuing maturation of the Syndicate.

The rate of growth in underwriting expenses within the Syndicate continues to moderate as the need to make major staff additions has declined and the business has matured. With the increase in premium and the moderation of expenses, the underwriting expense ratio was also moving lower at an encouraging rate.

The net loss ratio was up 4.5 points in the quarter as Syndicate 1729’s results were affected by specific events in the second quarter, such as the Canadian wildfires and storms in Texas and South Carolina.

Incurred losses remain within the expected range and the Syndicate is retaining an appropriate amount of reserves to deal with future uncertainties. But the fact remains that it's fair to expect variation in results in our Lloyd's segment, given the nature of the business being written.

The majority of the business remains US based and a broad mix of premium written year-to-date continues to be dominated by casualty coverage, which is 53% of the Syndicate’s premium. Property coverage accounts were 26%, catastrophe reinsurance is 17%, and property reinsurance comprises the remaining 4%.

On a forward-looking note, I can tell you that preliminary estimates of losses from the recent storms lead us to believe they will not have a material effect on the results of Syndicate 1729 net of reinsurance.

Frank?.

Thanks, everyone, for that summary.

Stan, some final thoughts from you?.

Thanks, Frank. I continue to see evidence that the broad strokes of our strategy are succeeding, despite operating in an intensely competitive environment.

While no one can predict what the road ahead has in store, I can promise that we will continue to meet that road with our customary underwriting and pricing discipline and our commitment to operating effectiveness. And we will do all of this while continuing to enhance an unmatched record of capital return and value creation for our shareholders.

Frank?.

Thank you, Stan. Dino, we’re ready to open the line for questions please..

Thank you. [Operator Instructions] And the first call is from Mark Hughes from SunTrust. Please go ahead..

Thank you very much. Good morning..

Good morning, Mark..

How much impact did that renewal effect have the – of policies renewing in odd year rather than even year? Physician premiums are down.

What proportion of that pressure came from that effect?.

It’s Howard. It’s $2.2 million this quarter..

And then as you think about the physician business, you say that it’s fiercely competitive. Renewals up 1%. That’s pretty good. You had some good success in Q2. How should we think about the prospects there? I guess, are you seeing the increased success in the hospital? I assume you had some visibility in pipeline there, at least volume of the pipeline.

Do we look for positive growth again in gross written premium?.

Howard again. Our major objective is to try to maintain the quality and the profitability of this business. And each quarter is a separate set of challenges, both the mix of the business that is renewing and the opportunities that are out there for new business.

Right now, we are more or less offsetting our renewal – the loss of business that we have as a result of the renewal retention, the marketplace competition and so forth with new business. And it varies – certainly, some quarters are better than other.

With the increased emphasis on the facility business and the consolidation in healthcare that results in larger accounts on the physician side, the impact of individual accounts has a much greater effect and you probably have seen that in prior quarters when we’ve talked about retention and when we’ve talked about new business.

So, in a way, I think it's probably a little bit more difficult to predict now than in the past in terms of whether a given large account renewal will affect retention in a quarter favorably or unfavorably and the ability to write or not write a particular new business and have an outsized effect. I think it’s tough to say.

I think – I would say that the run rate that we’ve been seeing recently is probably representative..

And, Mark, I would add to that that we remain very, very focused on securing an adequate price for the risk we’re asked to take. And so, we don’t look at it from a top-down standpoint, that is from the gross premium. The gross premium will be whatever it is as a result of us writing business at an adequate price.

And if that means the gross premium falls, so be it. If it means that we experienced increases in gross premiums, so be it. But that’s not the driver. Underwriting remains the driver..

Howard, you talked about – it’s setting a higher loss pick for the hospital business.

Do you expect losses to be higher there or are you being conservative and can you talk about the early loss emergence on the facility business?.

Sure. Let me first say, we've been writing hospital business since the mid-1980s. So, this is – it’s not new to us. What is newer in a way is just the emphasis on the larger account and facility business as a result of what’s happened in healthcare. The loss picks on that business tend to be higher because the business is more volatile.

A lot of it is written excess of significant deductibles or self-insured retentions. And as a result, you can have – the loss ratio volatility tends to be greater from year-to-year. Overall, it’s also a smaller book of business than our physician book. So, there’s that aspect of it just being less predictable.

And, historically, we have reserved initially at a higher loss pick on that business, not necessarily representative of profitability at all. Really just more representative of the volatility in the loss ratios that have been experienced..

You had a peer who described rising severity in professional liability and they highlighted the corrections industry and contract physician staffing.

Any exposure there? Any, like, experience?.

Yeah. We saw that yesterday. I think actually they talked about – little bit more about frequency than severity. But, nevertheless, we write both of those classes, the correctional facilities and physician staffing. They’ve never been a large portion of our business.

We've always been rather cautious from an underwriting perspective on that business because both of those classes have risk profiles that are a good bit different than the traditional physician business, physician medical professional liability.

Any type of business that involves staffing physicians at multiple locations creates a different underwriting profile since as an insurer we’re not able to – we’re not usually able to evaluate the individual physicians, we’re going to rely on the credentialing and the oversight of the entity itself.

And as a result, we place a great deal of emphasis on evaluating the internal processes and the credentialing and review processes of the organization. So, we've always done that.

We also believe that one of the keys to writing that business is to have significant deductibles or self-insured retentions, so that the group has a vested interest in the outcome of the results. And over the past few years, we've seen those in the marketplace.

We've seen low deductibles or even no deductibles become available and more common on that type – both of these classes of business and we really didn’t participate in that. So, like any other account that we look at, the pricing and the terms are really key for us.

On the correctional business, higher frequency is not unexpected at least from our perspective since a lot of inmates tend to look for opportunities for variety, if you will, in their daily lives and a lot of these claims are deemed frivolous, but they do cost money to defend. And it, again, speaks to the need for deductibles.

So, we have not seen that type of experience in these accounts nor really across our book to business, but we certainly are very attuned to it..

Thank you..

The next question comes from Amit Kumar from Macquarie. Please go ahead..

Thanks. Good morning. Thanks for taking my questions. Just a few quick questions. First of all, I guess, goes back to specialty and the increase in the underlying loss ratio in terms of the facility business and the business mix shift.

Howard, is that sort of a new trendline we're thinking of or is there a possibility that number would continue to tick up in the near future?.

No. It really – I guess what I was trying to say, it’s not a new trend or not anything different. We’re not doing things differently than we have historically. I think we’ve seen an increase in the facilities business and that caused a small movement in the loss ratio that we were trying to explain.

But underlying that, we’re still reserving it the way we have reserved it. And the overall mix of our loss ratio is really a mix of probably 100 different components that we break the business down into, by state, by class of business and some have higher initial loss ratios than others. So, in the past, we’ve talked about mix of business.

I think here we just got a little bit more specific about it in terms of pointing out that as the facility business has grown, the initial loss ratio on that is somewhat higher. It doesn't mean anything different in terms of what we ultimately expect for profitability of the business..

Got it. The second question was on the change in methodology in the Lloyd's piece.

Should we use the Q3 as a run rate sort of going forward or is the nine-month number a better trendline?.

The nine-month number is the better trendline..

Got it. That’s helpful. The final question I have for now is just the broader discussion on capital. And I know that, usually, you guys do a special a month from now. And in the past, the number has sort of varied from $1 to I think $2 plus in the past.

How are we broadly thinking about capital position here and how are we thinking about the special dividend?.

Thanks. First off, we don’t use the words special and usual in the same sentence. We do an evaluation of capital on just kind of a continual basis. It’s a topic that we discuss with our board every time we sit down with them. And so, we will evaluate it. We will look at the opportunity set that is out before us.

The opportunities to support our ongoing dividend. The opportunities to support our buyback initiatives. And then the opportunities in the marketplace and make decisions based on those factors as to other ways we might return capital..

I’m sorry.

What I was asking was, has your thought process changed on capital versus where you are in 2015?.

No. I think it’s important to understand is that the factors that run around, the other things I just mentioned can change, but the thought process has not changed..

So, we should expect a special in December?.

That’s not what I said. Because there are a lot of factors that are involved. The topics that we discuss with our board, there are a lot of external environmental factors that could impact that..

And that decision will be made by our Board of Directors and only one of them is here. So, nobody could make that decision today..

What’s your decision? No, I’ll let it go. Thanks for the answers then. Good luck for the future..

Thanks, Amit..

[Operator Instructions]. The next question comes from Paul Newsome from Sandler O'Neill. Please go ahead..

Good morning, everyone. Thanks for the call. I was hoping you could walk through, just with a little bit extra detail, the tax credit, just the mechanics of what we saw in the quarter with the amortization.

My sense, and maybe I’m just wrong, is that the way these typically work is, there’s some amortization that runs through your net investment income line, but there's hopefully more than that benefit below and that those are tied to each other, so that you’d see basically the same impact in the same quarter.

But it seems like this quarter you didn't have an offsetting benefit in the tax from whatever – sorry, the amortization you had.

And so, maybe, can you just talk about why you might have accelerated the amortization that doesn't get offset some place?.

Paul, thanks. I think, in general, that assumption about some level of matching has some basis, but not completely. The tax credits are somewhat decoupled from the operating losses of the underlying properties – those operating losses. We kind of look that all and call it amortization, but it’s actually amortization on operating losses.

Those operating losses, in particular, can fluctuate in timing. So, kind of the expected yield on the investments have not changed.

What we had in this quarter was a couple of tax credits where they have now filed their – in this case – in one case, 2014 and in 2015 tax return, and based on the information we receive from those tax returns, we recognized more operating losses in the period. That doesn’t necessary mean that, in the period, you’re going to get more tax credits.

The tax credits are more scheduled out based on when the properties were placed into service and became occupied. So, there can be some differences in the timing. I think a good point to understand is that the recognition of the tax credits does occur in some part ahead of the ultimate losses that you’re going to see on the properties.

And so, as the tax credits run out, what you'll see is a decline in tax credits and an increase in these operating losses and amortization. Again, when you look at the life of each of these credits, though, have had a very positive return on the company.

If you look back in the last couple of investor presentations that we put out there, there's a chart that kind of demonstrates some of that, to give you some better detail. But those operating losses are unfortunately a little less predictable than kind of the core amortization, and that's what caused the fluctuation in the quarter..

And we will be updating that chart Ned referenced when we file our third quarter investor update. And it will include all the information. That will be sometime early next week – or week after next, I think..

Is this particularly – so we should – it sounds like we should expect some volatility around that, those operating losses prospectively? And what we saw was maybe a little bit bigger than normal, but not structurally unusual..

Paul, I think that's right. And I think important to know there's nothing in that acceleration that portends larger ultimate losses on these investments than we would have anticipated. And as I mentioned, this was a two-year catch up on one credit, in particular. I think that’s part of the reason that we saw such a big change.

But there will be some volatility around the recognition of those operating losses as we get information from the individual credits and the properties associated with those credits. And there’s always a lag in that timing..

Great. That clears things up for me. Thank you..

Sure, Paul..

The next question comes from Ryan Byrnes from Janney. Please go ahead..

Great, thanks. Good morning, everybody. Yeah, just want to focus a little bit more on kind of the capital management, I guess, going forward. Historically, you guys have done a fair amount of acquisitions. But you’ve been pretty quiet the last couple of years, I guess, excluding Eastern.

And just wanted to get your thoughts there on, I guess, the pipeline and where – I guess where sellers are right now with – especially in the medical malpractice area as the top line or the pie continues to shrink there a little bit..

It’s Stan. The answer to the question is that we remain open to rational opportunities that present themselves. The difficulty today is that unlike in past decades, so many people in this industry regard themselves as acquirers.

There was a long, long runway in which we were one of the only or few people who could legitimately seek to provide consolidation within the industry. The results of the last number of years have been very well received by the industry and successfully so. This has left many of our mutual brethren in a position where they too can be acquirer.

So, you see a much larger universe of potential acquirers in this space and has historically been true. This has led into what we regard as irrationally high pricing expectations on the part of the people that might be acquired and a willingness to offer or pay irrational prices on the part of people doing the acquiring.

There was a long period of time in which we needed to make acquisitions either to fill out our strategy or to fill out of our geography. As I’ve said before in these calls, we no longer have to make any acquisitions. We will be open to doing so on terms that make sense for our shareholders and for our overall business strategy.

But we will steadfastly avoid paying sums, which we don't think can be justified. We see some acquisition opportunities, but we see that they tend to lean toward prices that we just can't make sense of and we’re not going to participate in that type of market.

So, the short answer to your question is, we will be open to doing acquisitions that make sense, but we will not chase deals that simply cost too much money in our judgment..

Okay. No, great. Thanks for that color. And just my last one would be, on the flip side of the M&A environment, it seems like some of the Asian – I guess there have been a bunch of the Asian buyers looking to get access to the US market. I just wanted to see your thoughts on that.

And is there anything structural that – the medical malpractice that your clients like the – with the US company, is there structural issues there that would preclude, I guess, an Asian buyer looking at you guys?.

Just as an overarching principle, I’ll say to you that our board has a very strong level of confidence in the strategy we’re pursuing and the board regards our future as compelling. That being said, we're not a management team or a board that sits around worried about somebody buying us.

If somebody comes forward with something that’s more compelling for our shareholders, our board will take all appropriate action.

Without regard to ProAssurance, but just looking at some of the Asian acquisitions that you have mentioned, it seems to us that the Asian acquirers are looking for platforms and they're not looking into the specialty business. And so, that means that ProAssurance is not an organization that would pick that platform descriptive.

I would also mention to you, the medical professional liability insurance is not an area that’s well-known to large segments of the world geography, and so we’re probably not familiar to a lot of people. And as I say, we've not been the recipient of many overtures from any of those organizations..

Thanks. That was great. Thank you so much..

This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Frank O'Neil for any closing remarks..

I thank everybody for being with us on the call today. Our next call is planned to discuss fourth quarter results and that will be in 2017. So, we’ll wish everybody a happy holiday season and a great New Year and speak to you sometime after the first of the year..

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect..