Fitch Affirms Rating for ProAssurance Corp.

March 2, 2005

Fitch Ratings has affirmed the ‘A-‘ insurer financial strength ratings of ProAssurance Corporation’s primary insurance operating companies — The Medical Assurance Company Inc., ProNational Insurance Company, and MEEMIC Insurance Company as well as the ‘BBB-‘ long-term issuer rating to ProAssurance Corp. (PRA). The Rating Outlook is Stable.

Fitch’s rating action follows management’s announcement of a proposed merger with NCRIC Group Inc. (NCRIC) in a stock-for-stock transaction. Washington D.C.-based NCRIC’s operating subsidiaries are primarily engaged in providing medical malpractice insurance in the Mid-Atlantic region (i.e., primarily the District of Columbia, Virginia, Maryland and Delaware).

While Fitch recognizes the operational risks arising from the proposed transaction, it believes that these are largely mitigated by the more modest size of NCRIC relative to PRA, management’s successful track record of integrating businesses and the potential diversification benefits NCRIC’s book of business provides PRA.

PRA’s ratings are based on the solid financial condition of its operating subsidiaries, above average profitability relative to peers, good financial flexibility and highly experienced management team that employs a conservative operating strategy that is focused on long-term underwriting profitability.

PRA has an established reputation for providing quality service and expertise in risk management as well as a strong track record of aggressively defending non-meritorious claims which benefits customer loyalty and reduces fraud. Geographic diversification is good with no single state accounting for more than 25% of premiums and the top five states accounting for about 70% at year-end 2003.

Alabama-based PRA is a publicly traded insurance holding company with operating companies that focus on providing medical malpractice insurance and to a lesser extent personal lines coverage in Michigan. The company ranks among the top five U.S. writers of medical malpractice insurance. At Dec. 31, 2004 PRA reported consolidated assets of $3.2 billion and shareholders equity of $611 million.

Entity/Issue/Type Action Rating/Outlook

ProAssurance Corp.

— Long-term issuer Affirm ‘BBB-‘/Stable;

— Convertible debs due 2023 Affirm ‘BBB-‘/Stable.

MEEMIC Insurance Company

— Insurer financial strength Affirm ‘A-‘/Stable.

The Medical Assurance Company, Inc.

— Insurer financial strength Affirm ‘A-‘/Stable.

Pronational Insurance Company.

Was this article valuable?

Here are more articles you may enjoy.