ProAssurance Corp. of Birmingham, Ala., reported significant increases in premiums, income and earnings per share for the quarter and six months that ended June 30, 2003. In addition, according to the company the professional liability segment continued its return to profitability in the quarter, and its personal lines segment again posted a combined ratio below 90 percent. Overall the company’s combined ratio was 106.7 percent.
Income for the second-quarter 2003 grew to $8.79 million, or 30 cents per diluted share, up from the $1.08 million, or 4 cents per diluted share, reported in the second-quarter report last year. Revenue for the second quarter rose more than 27 percent over the same period the previous year to $169.1 million compared with $132.7 million.
Chairman A. Derrill Crowe, M.D. noted, “We believe ProAssurance’s performance so far this year validates our focus on adequate pricing and careful underwriting in both segments of our business.”
He further explained that ProAssurance’s commitment to its insureds also plays a large role in the company’s success. “As we have increased prices to realistic levels to account for more severe loss trends, we have also raised our already high expectations for the quality of service we provide to our policyholders. That has helped us retain desirable insureds, while attracting new customers who value the strength of our balance sheet and our ability to keep our long-term promise to resolve their insurance claims.”
During the second quarter, A. M. Best affirmed the financial strength of ProAssurance’s insurance subsidiaries at “A-” (Excellent) with a “stable” outlook. Standard & Poor’s affirmed its “A-” (Strong) rating on ProAssurance and maintained its “negative” outlook, primarily because of concerns about the medical liability market. ProAssurance’s president, Victor T. Adamo, commented, “At a time when many competitors have been downgraded, we believe the affirmation of our ratings is another factor that differentiates ProAssurance in the marketplace.”
The companies in ProAssurance’s professional liability segment are The Medical Assurance Company Inc., Medical Assurance of West Virginia Inc., ProNational Insurance Company and Red Mountain Casualty Insurance Company Inc. Each focuses on the delivery of professional liability insurance to physicians and surgeons, dentists, hospitals, and others involved in the delivery of health care.
“The medical professional liability market remains challenging, but we believe our approach remains sound. Loss trends continue to drive our pricing higher, and we are committed to maintaining the rate adequacy we have worked so hard to achieve. The recent failure of one competitor and the downgrade of several others provides us with a clear example of what can happen to companies that believe they are doing their customers a favor by charging less than adequate premiums,” Crowe said.
MEEMIC Insurance Company (MEEMIC), the sole company in ProAssurance’s personal lines segment, principally provides auto and homeowners’ coverages, primarily for educational employees and their families.
“MEEMIC’s policyholder count is increasing as the company expands into under-represented areas in Michigan, and increases its penetration in the parochial and higher education markets,” Crowe said. He pointed out that homeowners rates rose by 22 percent in July of 2002 and are now being fully earned on a larger policyholder base.
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