Last week, Medical Protective Corporation, the oldest and second largest admitted primary medical professional liability insurer, officially became a member of the Berkshire Hathaway group of businesses, upon completion of the previously announced purchase agreement with GE Insurance Solutions.
Standard & Poor’s immediately upgraded Medical Protective to its highest “AAA/Stable” financial strength rating, and AM Best affirmed its “A-” (Excellent) financial strength rating, with “Positive Outlook”.
“This transaction is a big win for the over 75,000 Medical Protective policyholders, as well as our dedicated distributor- and attorney- business partners throughout the nation,” said Timothy Kenesey, president and CEO of Medical Protective. “The past seven years under GE ownership have provided terrific learning opportunities, and we are grateful for what was a great partnership with GE.
“As we look to the future, Medical Protective is indeed, as GE’s Jeff Immelt stated, ‘moving into a bright future’ with our new owner. Berkshire is committed to growing profitably its insurance segments, and to helping Medical Protective continue serving healthcare providers with the nation’s (i) strongest financial security, (ii) most winning and proactive defense, and (iii) best risk management and patient safety education. Even more, Berkshire is looking to help us accelerate our service to healthcare providers, with AAA capital support and world-class investment management.”
For Berkshire Hathaway, a company engaged in a number of diverse businesses, among which the most important is property and casualty insurance, Medical Protective is reportedly a perfect fit. As Warren Buffett, chairman of Berkshire Hathaway, previously stated: “For 100 years, Medical Protective has been the ‘gold standard’ in protecting and defending the assets and reputations of healthcare providers. The Medical Protective team has successfully navigated through difficult insurance cycles by consistently delivering the nation’s best defense for doctors and solid results for shareholders. Medical Protective will be a great addition to the Berkshire Hathaway group of businesses.”
In assigning Medical Protective its highest “AAA” financial rating, S&P noted that “Medical Protective’s ratings reflect its leading market position, effective distribution, … disciplined underwriting and pricing, and prospectively strong earnings.” A.M. Best, while affirming Medical Protective’s rating, acknowledged Medical Protective’s leading market presence, distribution capabilities and aggressive claims philosophy.
A.M. Best also assigned a “Positive Outlook”, noting that following the completion of certain intra-company agreements, Medical Protective, “could be upgraded by multiple levels on an issuer credit rating scale.”
“We are obviously pleased with last week’s ratings upgrade and affirmation,” said Kenesey. “They are tangible evidence of our industry leadership in service of healthcare providers, and of Berkshire’s reputation and commitment. For over a century – while so many others in this segment have come and gone – Medical Protective has proven consistently able to protect the assets and reputations of the nation’s health care professionals, while remaining financially solid. Our past successes have been driven by our focus on, and commitment to, maintaining our long-term promise to provide the highest quality defense of our policyholders at all times. We look forward to building on this tremendous foundation as a member of Berkshire.”
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