Fitch Ratings has reviewed ProAssurance Corporation's (PRA) planned acquisition of Podiatry Insurance Company of America, Inc. (PICA) for $120 million, anticipated to close in first-quarter 2009, and expects that the transaction will have no impact on PRA's current ratings and Outlook. PRA currently has an Issuer Default Rating (IDR) of 'BBB+' and unsecured convertible debt rating of 'BBB', while PRA's primary insurance operating companies (listed below) have an insurer financial strength (IFS) rating of 'A'. The Outlook on all ratings is Stable.
Fitch views the acquisition of PICA to be consistent with PRA's operating strategy and core business. This transaction will be financed with holding company cash. As of June 30, 2008 PRA's holding company had $178 million in cash.
The PICA Group, based in Nashville, TN, is the nation's leading provider of professional liability to doctors of podiatric medicine, insuring approximately 9,800 podiatric physicians in 47 states and DC. PICA insures other health care professionals and also provides E&O insurance for a small, but growing, number of independent insurance agents. PICA wrote $99 million in premium in 2007, has $284 million in total assets, and has a 'BBBq' quantitative rating from Fitch.
Fitch also notes that ProNational Insurance Company, an operating subsidiary of PRA, recently purchased Georgia Lawyer Insurance Company for $4.6 million. This transaction is also anticipated to close in first-quarter 2009. Fitch notes this deal increases PRA's legal professional liability business. PRA is also establishing new relationships with agencies that produce legal professional liability business in 11 additional jurisdictions in the Mid-Atlantic states and the far west. These moves complement PRA's existing $10 million book of legal professional liability business in the Midwest.
Fitch has takes no action on the following ratings with a Stable Outlook:
ProAssurance Corporation
--IDR of 'BBB+';
--Senior debt rating of 'BBB';
--$105 million, 3.9%, convertible debt due June 30, 2023 at 'BBB'.
Fitch has taken no action on the 'A' IFS rating of the following companies with a Stable Outlook:
--The Medical Assurance Company, Inc.
--ProNational Insurance Company
--NCRIC, Inc.
--Red Mountain Casualty Insurance Company
--Physician's Insurance Company of Wisconsin
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.
Contacts:
Gerald Glombicki, 312-606-2354
James B.
Auden, CFA, 312-368-3146
or
Media Relations:
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Frederick-Mack, 212-908-0540, New York
Email: tyrene.frederick-mack@fitchratings.com
