NCRIC Group Inc. announced that the financial rating of its insurance subsidiary, NCRIC Inc., has been changed by A.M. Best Company from “A-” (Excellent) to “B++ ” (Very Good) with negative implications.
The action by A.M. Best follows the Feb. 28, 2005 announcement of NCRIC Group’s fourth quarter and year-end 2004 results of a net loss of $8.3 million and $7.1 million, respectively. The results were driven primarily by adverse development on claims reported in prior years. The rating will remain under review pending A.M. Best’s review of NCRIC Inc.’s loss reserves, completion of the transaction and discussions with management.
“This is not unexpected given our 2004 results,” said R. Ray Pate, Jr., the president and CEO of NCRIC Group Inc. “However, we are very disappointed that A.M. Best has taken this action given our announcement of a definitive agreement to merge with ProAssurance. After the merger is completed, we anticipate that NCRIC, Inc. will continue to operate as a D.C. domiciled insurance subsidiary of ProAssurance. Our goal is to restore the rating to its previous level of ‘A-‘ once A.M. Best has more time to factor in the financial strength provided by the transaction with ProAssurance.”
Pate further commented that NCRIC is very pleased to join the ProAssurance family of companies and that the company is looking forward to continuing to serve the physicians of the mid-Atlantic region. He said, “We entered into the agreement to merge NCRIC Group, Inc. – the parent company of NCRIC Inc. – into ProAssurance out of concern for our ability to continue to operate successfully as a small, independent medical professional liability insurance company in today’s volatile climate. ProAssurance writes approximately $790 million in gross written premiums and has assets in excess of $3 billion. This transaction provides us with the necessary financial stability to continue to fulfill our promise to policyholders in our various markets.”
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